Online streaming powerhouse Netflix (NFLX) and comedy legend Adam Sandler are teaming up for an exclusive four-movie deal. According to Netflix’s exuberant press release celebrating the new pact this morning, Sandler will both star in and produce four original feature-length films. The films will be available solely on Netflix and will not hit theaters.
NFLX cited Sandler’s popularity on its website to justify the deal, the financial terms of which were not announced. The former SNL star’s films have grossed more than $3 billion globally at the box office, and Sandler is one of the most-watched actors on all of Netflix, the company said.
Sandler himself had a curious explanation for his mindset in regards to the deal:
“When these fine people came to me with an offer to make four movies for them, I immediately said yes for one reason and one reason only…. Netflix rhymes with ‘Wet Chicks.’ Let the streaming begin!!!!”
” All jokes aside, Netflix continues to upend traditional Hollywood business models by leading the shift towards digital distribution. Netflix original series have done extremely well, with House of Cards, Orange is the New Black, and the belated return of Arrested Development. Twenty-First Century Fox (FOXA) first aired Arrested Development between 2003 and 2006. Netflix revived the series in 2013 after it became a cult classic.
Tech giants and Tinseltown regulars alike are both taking note of the NFLX model, and are responding to it in different ways.
Amazon (AMZN), for instance, has noticed the wildly popular world of streaming video and tried to move in on the space. Many of the same movies that are offered on Netflix are offered on Amazon Prime Instant Video. That said, AMZN’s original series have not been remotely as popular as Netflix’s.
Time Warner (TWX) subsidiary HBO and its HBO Go streaming service is perhaps Netflix’s stoutest competitor. However, HBO isn’t nearly as competitive as the $8.99 per month Netflix charges — costing an average of $16 per month and requiring a cable subscription.
Disney (DIS) has taken a different approach, choosing to embrace the NFLX model rather than fight it. In July, Netflix and Disney reached a deal giving Netflix the exclusive right to stream Disney films in Canada. Though terms were not disclosed, the style of the deal resembles a major pact the two companies struck in 2012, in which Netflix received the exclusive rights to show Disney movies eight months after they debut in theaters. That deal was for the U.S. market, however, and will come into effect in 2016. It will cost Netflix $300 million annually.
While today’s Netflix-Adam Sandler pact probably isn’t that rich, it shows Netflix’s continual willingness to shell out for popular exclusive content, which could help the company and NFLX stock in the future.
John Divine is an Assistant Editor at InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities.
