HBO extends Universal deal, keeping films from Netflix

LOS ANGELES Mon Jan 7, 2013 8:55am IST

The logo for HBO,Home Box Office, the American premium cable television network, owned by Time Warner, is pictured during the HBO presentation at the Cable portion of the Television Critics Association Summer press tour in Beverly Hills, California August 1, 2012. REUTERS/Fred Prouser/Files

The logo for HBO,Home Box Office, the American premium cable television network, owned by Time Warner, is pictured during the HBO presentation at the Cable portion of the Television Critics Association Summer press tour in Beverly Hills, California August 1, 2012.

Credit: Reuters/Fred Prouser/Files

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LOS ANGELES (Reuters) - Home Box Office said Sunday it extended its deal with Universal Pictures for the rights to the studio's movies through 2022, allowing HBO to keep them away from video-streaming rival Netflix, which is aiming to compete with HBO, Showtime and TV outlets.

Further details of the agreement were not provided by HBO, a unit of Time Warner (TWX.N), or by Comcast's (CMCSA.O) Universal studio.

Moves by Netflix Inc (NFLX.O), which offers subscription video streaming and DVD rentals, to offer original programming and newer movies put it into closer competition with HBO and similar premium TV channels.

Last month, Netflix paid what analysts said at the time was more than $350 million for the exclusive rights to stream Disney (DIS.N) movies to TV beginning in 2016, the video company's first agreement with a major movie studio after pacts with smaller independent studios.

Universal's agreement with HBO was set to expire in 2015, fueling speculation among Hollywood executives that Netflix would also target the studio that produced this year's breakout hits "Ted" and "Les Miserables."

"With HBO's far-reaching network of premium services, ranging from the traditional in-home experience to its mobile applications, we are pleased to continue this relationship and bring Universal and Focus Features' films to HBO subscribers for many years to come," said Rick Finkelstein, Universal vice chairman and chief operating officer.

Netflix spokesman Joris Evers had no comment.

In August, HBO renewed its deal with News Corp's (NWSA.O) 20th Century Fox that was set to expire in 2015. Terms were not disclosed, but the Los Angeles Times said the channel was expected to pay around $200 million annually for the movies. The Fox deal was extended through 2022. HBO also has a movie pact with "Twilight" studio Summit Entertainment, a unit of Lions Gate Entertainment (LGF.N).

With the Universal agreement, HBO now owns rights to about 50 percent of Hollywood's movie output for the next 10 years. The network feels it has a full film schedule and is not planning to pursue movies from Sony Corp (6758.T), a source close to HBO said. Netflix has been talking to Sony about a possible deal, a source with knowledge of the matter told Reuters last month.

Before its agreement with Disney in December, Netflix signed deals for new films with smaller studios, including Relativity Media, The Weinstein company and DreamWorks Animation (DWA.O).

Netflix, which started its streaming business with mostly older films, has been moving to add more original programming and produces TV shows such as "Lilyhammer," which stars "Sopranos" actor Steven Van Zandt as an American gangster who starts a new life in Norway. The company also struck a high-profile deal with actor Kevin Spacey for "House of Cards," which premieres February 1.

(Editing by Cynthia Osterman, Bernard Orr)

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