Netflix’s muscle-flexing deal yesterday with Disney not only reinforces the fact that it is a programming distributor to be reckoned with, it is also forcing rival Hulu to reconfigure its business plan, sources tell The Post.
Hulu CEO Jason Kilar must either step up and acquire additional distribution rights to compete head-to-head with Netflix or drop its fee and focus on free offerings, the sources said.
“Hulu has to pick its poison,” one source said. “It really makes it hard if the Hulu partners are going to license their content like this.” Hulu is backed by News Corp., NBC Universal, Disney and Providence Equity Partners. News Corp. also owns The Post.
In the latest of several eye-popping deals over the past several months, Netflix is acquiring hundreds of episodes of current and older shows for its streaming service.
Disney is contributing every episode of “Lost” and “Ugly Betty,” along with in-season shows from its two cable channels ABC Family and the Disney Channel, albeit on a 15-day delay, along with the back catalog.
Terms were not disclosed, but the Los Angeles Times reported the deal is worth $200 million.
The latest development broadens an earlier agreement with Disney, but runs counter to expectations that Hollywood is inclined to make it tougher for Netflix to get its hands on more content.
The Disney deal was announced just weeks after NBC Universal made a similar agreement to offer the service old episodes of “SNL” for the next three years — as well as access to its entire back catalog.
The NBCU arrangement also includes previous episodes of the hit comedy “30 Rock.”
“The Disney relationship is a one-year deal,” Barton Crockett, media analyst with Lazard Capital, told The Post. “Netflix is more incremental than cannibalistic, so why not ring the cash register and put the money in the bank?”
Netflix shares fell $1.58 to $188.23 yesterday, but are up 242 percent year to date.