DreamWorks CEO: Netflix Has the Perfect Audience for Us

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You can be more excited than this little guy about DreamWorks’ deal with Netflix.

CEO Jeffrey Katzenberg has taken DreamWorks Animation (NASDAQ:DWA) from a conventional film company and turned it into a studio that produces hundreds of hours of television programming in multiple nations around the world, not to mention the proud owner of a new studio in Shanghai.

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Earlier this week, DreamWorks announced a deal with video streaming company Netflix (NASDAQ:NFLX) that it will produce over 300 hours of original programming, giving Netflix exclusive rights to those television shows and movies. The deal is expected to return $100 million to DreamWorks in 2013, with that number jumping to $200 million in 2015, according to CNBC.

Netflix has reinvigorated its streaming service by licensing original content and producing some of its own, most noticeably “House of Cards,” which was released earlier this year. In doing so, the company retained many customers that had threatened to take their business elsewhere. But now DreamWorks believes Netflix has the perfect audience for its programming.

“This is where family and kids are,” Katzenberg said. They’re probably “the No. 1 destination for kids.”

Other perks that please DreamWorks are that they retain total creative control over their shows and films. Plus, rather than getting the okay for a mere 13-episodes at a time, like at conventional TV networks, they get green-lighted for entire seasons at a time.

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Other good news for DreamWorks comes in the form of its new Shanghai studio, announced last year. The deal was struck with two Chinese media organizations and the new company, Oriental DreamWorks, will produce and distribute both animated and live-action, in addition to animated TV programming.

Katzenberg noted how much opportunity there is in China now.

“It’s opened up significantly in the last two years, and it’s a much, much more open market today,” he said. “They look at 7 percent, 7.5 percent growth in GDP as a problem. We’d be dancing in the streets.”

Indeed. Any more deals comparable to the one struck with Netflix, and Katzenberg may just have to.

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