Paramount Home Media Distribution, a unit of
), has entered into an agreement with Warner Bros. Home
Entertainment Group, a unit of
Time Warner Inc.
), to distribute the physical discs of 600 movies from Paramount's
stable. The deal is expected to enrich the long-term value of
Paramount's older movie titles.
According to the terms of the deal, Time Warner will get the
exclusive right to distribute the Blu-ray and DVDs of the selected
600 movies in the U.S. and Canada including the films like
Terms of Endearment
Ferris Bueller's Day Off
, and others. Flixster - the Warner Bros. movie streaming and
discovery services will get the non exclusive right to sell the
movies in Ultra Violet electronic sell through (EST), Ultra Violet
Disc-to-Digital and Video On Demand (VOD) format.
Additionally, Flixster will also act as a dedicated locker
access service provider for all paramount ultraviolet movies.
The three-year deal is expected to commence from the beginning of
On the flip side, Paramount will retain all digital rights for
these titles including the EST, VOD and subscription
video-on-demand format and doesn't provide the rights to distribute
blockbuster Paramount films like
. As part of the deal, Viacom will receive licensing fees and will
receive various long-term strategic co-operations from
In the modern era of digitalization more and more subscribers
now prefer to view movies online through their smartphones and
tablets. We believe it's a strategic move by Viacom to expand its
digital presence through Flixter, which develops movie discovery
applications for several social networking sites.
The agreement, if becomes successful, will promote its digital
content ownership in addition to expanding its already impressive
Ultra Violet library that necessarily allows streaming and
downloading of content on multiple
We are maintaining our long-term Neutral recommendation on
Viacom Inc. However, currently, the company retains a Zacks #3
Rank, implying a short-term Hold rating.
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