Four Film Companies That Should Follow Dreamworks to Netflix

Streaming video giant Netflix (NASDAQ: NFLX ) lost about 1 million paying
subscribers to its new dual-pricing model. Heres what worried investors need to
consider, though: Netflix still has a total subscriber base of more than 23
million customers, and 21 million of them subscribe to the streaming service.
For movie companies still finding their feet in streaming video, Netflix still
is like it or not where the audience is. Dreamworks (NASDAQ: DWA ) knows it:
The company behind movies like Shrek announced a new agreement with Netflix on
Sunday, one that will bring its movies to the streaming service instead of Time
Warner s (NYSE: TWX ) HBO in 2013. The deal will bring Dreamworks an estimated
$30 million per movie when it goes into effect. Netflix needs partners now more
than ever, and movie-makers need to reach an audience disinterested in going to
theaters or buying DVDs. Here are four movie-makers that investors should keep
an eye on as key Netflix partners in the coming year: Sony Sony (NYSE: SNE ) has
been hurting as a whole during the past two quarters. The March earthquake and
tsunami in Japan, hurting production and resulting in poor television sales,
fueled a net loss of $191 million in the quarter that ended in June. However,
the companys movie division, Sony Pictures, remains a bright spot for the
company, raking in an operating profit of $53 million during the same period. It
was at the end of that quarter that Netflixs failed negotiations with Liberty
Media s (NASDAQ: LSTZA ) Starz saw Sonys movies pulled from the streaming
service . At a time when Sony could use every last bit of revenue from its
movie-making segment, the company should follow Dreamworks lead in partnering
with Netflix rather than a traditional movie channel like Starz, especially when
it could mean $30 million in revenue per movie. Walt Disney Walt Disney (NYSE:
DIS ) is enjoying some renewed vitality in its theatrical movie business thanks
to the re-release of The Lion King in 3D . However, its future in the streaming
video is fuzzy at this point in time. Its films will disappear from Netflix when
Starz does in the coming months, and competing service Hulu, partially owned by
Disney, is likely to sell to another company soon . Disney needs to decide soon
whether it wants to run its own streaming service or provide its content to
multiple partners. Viacom (NYSE: VIA ) has proven that licensing to many
streaming partners is most profitable , and Disney would benefit greatly from
partnering directly with Netflix following the dissolution of its agreement with
Starz, the same as Sony.