Bloomberg News

HBO Said to Stop Sales of DVDs to Netflix After Accord Expires

January 06, 2012

Jan. 5 (Bloomberg) -- HBO, Time Warner Inc.’s premium cable network, halted sales of DVDs to Netflix Inc. following the Jan. 1 expiration of an agreement between the companies, according to a person with knowledge of the situation.

HBO chose not to renew the deal as it pursues a separate strategy of expanding HBO Go, an on-demand streaming service, in conjunction with pay-TV operators, said the person, who would only speak anonymously.

The cable channel had agreed to sell discs at a discount to Los Gatos, California-based Netflix, operator of a DVD-by-mail and online streaming service.

Steve Swasey, a Netflix spokesman, had no immediate comment, as did Keith Cocozza, a spokesman for Time Warner. Netflix often acquires DVD from third-party distributors.

Netflix fell 1.4 percent to $79.30 at the close in New York. New York-based Time Warner gained 0.8 percent to $36.79.

HBO’s decision was reported earlier by the New York Times.

--With assistance from Cliff Edwards in San Francisco and Michael White in Los Angeles. Editors: Rob Golum, Anthony Palazzo

To contact the reporter on this story: Edmund Lee in New York at elee310@bloomberg.net

To contact the editor responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net


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