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 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.