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

HBO, Time Warner Inc. (TWX)’s premium cable network, halted sales of DVDs to Netflix Inc. (NFLX) 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 wasn't authorized to speak publicly.

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. Netflix often acquires DVD from third-party distributors.

Steve Swasey, a Netflix spokesman, had no immediate comment. Keith Cocozza, a spokesman for New York-based Time Warner, declined to comment.

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

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

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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