Website expands digital deal with Disney

A month after launching a streaming-only subscription, Netflix is busy growing its library of digital movies and TV shows: Its latest deal adds more content from ABC, Disney Channel and ABC Family.

Disney-ABC Television Group will start offering older episodes of ABC’s “Grey’s Anatomy” and “Desperate Housewives” as digital streams to Net-flix’s 16 million members. The complete run of “Lost” will also be added to the library, while “Brothers and Sisters” and “Ugly Betty” are making their bows on Netflix.

Deal covers mostly library content with the exception of current-season episodes from selected Disney Channel and ABC Family series. Those episodes will be made available no earlier than 15 days after their initial telecast. The ABC broadcast net makes next-day streaming of current skeins available through ABC.com, Hulu and for purchase via iTunes.

Disney Channel’s “The Suite Life on Deck” and “Wizards of Waverly Place,” as well as “Hannah Montana” and “The Suite Life of Zack and Cody,” had already been available on Netflix, but more episodes will now be added from those shows, while “Phineas and Ferb” and “Good Luck Charlie” are new to Netflix.

ABC Family’s lineup of shows, including “Greek,” “Make It or Break It,” “The Secret Life of the American Teenager” and “Melissa and Joey,” hadn’t been available on Netflix until now.

ABC Studios is also including the entire runs of “Scrubs” and “Reaper,” both new additions to Netflix.

In addition, Disney Channel and ABC Family will also offer up TV movies “High School Musical,” “High School Musical 2,” “Camp Rock,” “Beauty and the Briefcase,” “Avalon High,” “Camp Rock 2: The Final Jam” and “Revenge of the Bridesmaids.”

Netflix offers streaming-only memberships for $7.99 a month.

New content deal with Disney-ABC Television Group comes as Netflix is in the midst of renegotiating an existing pact with Liberty Media’s Starz, through which the rental service is able to offer online streams of Disney and Sony movies. Deal expires next year.

Relationship has existed since 2008, with Netflix reportedly ponying up $20 million-$30 million to the studios for the digital rights.

Either way, the new Disney pact continues Netflix’s effort to become a bigger player as digital distributor rather than a DVD-by-mail rental outfit.

It also comes as Hollywood’s top execs are trying to figure out whether to ink their own agreements with Netflix or seek out more lucrative pacts with traditional cable operators. While Netflix can certainly provide an additional revenue stream, the money it’s offering content owners is still a fraction of what cable operators have paid in the past.

Time Warner chief Jeff Bewkes has criticized Netflix for offering only $50,000-$100,000 to stream TV shows whereas traditional channels pay “millions of dollars” per episode for the same content.

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