Netflix Signs Expanded Two-Year Streaming Deal With Discovery

Discovery will continue to stream its library shows on Netflix (NSDQ: NFLX) for another two years, with an expanded slate that includes more prior seasons. The new deal with Discovery Communications (NSDQ: DISCA) doesn’t fill the hole in the movie catalog that will be left by Starz in 2012 but it is a reminder that Netflix, which has lost more than half its market cap since the July decision to split streaming and DVD, is committed to keeping the content partners it has — and to increasing the amount of streaming programming.

Aside from the brand choice of Qwikster itself, the lack of depth in streaming content is one of the most constant themes in the overwhelmingly negative response to the spin off the DVD business from Netflix. Filling that gap — and making sure it keeps the programming it has — was a priority before the split was announced. The Starz decision not to renew its deal, which included access to first-run movies from Sony (NYSE: SNE) and Disney (NYSE: DIS), amped up the pressure.

The non-exclusive licensing deal covers Discovery, TLC and Animal Panet, and adds Investigation Discovery, Science and Military Channel. (Among the Discovery Communications networks not included: joint ventures OWN with Oprah Winfrey and The Hub with Hasbro.) Series include Discovery Channel’s Man vs. Wild, TLC’s Say Yes to the Dress, and Animal Planet’s River Monsters.

It’s tempting to look at this only though the lens of Netflix, which is in the midst of a PR meltdown over the split and the way it was handled. CEO Reed Hastings has received more than 25,000 comments to his Sunday blog post simultaneously announcing Qwikster and apologizing for the way the split has been handled — and you have to rad through a lot of them before getting to a positive response.

But it also comes out just ahead of Discovery CEO David Zaslav’s appearance at Goldman Sachs Communicopia. Zaslav committed early to a strategy that keeps current shows from free streaming and looks for ways to make money from streaming archives. Extending a deal with Netflix isn’t huge news in the grand scheme of things but it does give him the chance to underscore that strategy.