(Reuters) - Video streaming service Netflix Inc is beefing up its original programming menu through a multi-year deal with DreamWorks Animation SKG Inc, the maker of movies such as Shrek, Madagascar and Kung Fu Panda.
Netflix shares rose 5 percent to $224.51 in premarket trading. DreamWorks shares were up marginally.
DreamWorks said the deal, which involves 300 hours of new programming, is a cornerstone of a major initiative to expand its television production and distribution.
The agreement is Netflix's largest for original programming, the companies said in a statement.
Online streaming companies such as Netflix, Amazon and Hulu are spending heavily on content as they compete with each other for a piece of the fast-growing market for movies and television shows delivered over the Internet.
In early June, Amazon.com Inc wrote its largest-ever check for a subscription-streaming deal, securing hundreds of mostly childrens' TV programs from Viacom Inc for its internet video service.
Netflix is trying to gain new subscribers with original series including the Kevin Spacey drama "House of Cards".
The company brought back cult television comedy "Arrested Development" in May, allowing viewers to see the entire 15-episode season together, harnessing the trend of viewers 'binge-watching' TV series online and through DVDs.
Netflix stopped streaming popular programming from Viacom's Nickelodeon in May following the expiration of a contract.
Netflix will premiere the new DreamWorks shows in all the territories in which it operates. The first of the new series announced on Monday is expected to be available in 2014.
The two companies said in February a series called "Turbo: F.A.S.T," based on the upcoming DreamWorks film "Turbo," will debut exclusively on Netflix in December.
(Reporting by Sayantani Ghosh and Lehar Maan in Bangalore; Editing by Sreejiraj Eluvangal)