Animation has become one of streaming’s most crowded battlegrounds, with studios increasingly looking beyond their own platforms for the next big family hit. Skydance Animation entered that race after moving on from Apple and finding a new home with Netflix, bringing a slate of original features and established creative talent along with it.

The arrangement is taking a sharp turn now, as Skydance’s corporate story morphs along with its merger with Paramount, reshaping the studio behind the films. Now, what began as a promising new home for Skydance Animation has since become another old chapter in Hollywood’s ever-shifting streaming story.

Deadline has exclusively reported that Netflix and Paramount are ending their animated film agreement after 3 years. The deal originated in October 2023 as a multi-year arrangement between Netflix and Skydance Animation, following the animation studio's departure from its previous partnership with Apple. Netflix became the home for Skydance’s existing and upcoming animated features, creating a pipeline that would eventually include several major releases.

The corporate picture changed considerably afterwards. Skydance merged with Paramount in August 2025, bringing its animation division under Paramount while its existing Netflix arrangement continued. Now, the two companies have mutually decided to conclude the agreement, as per Deadline, although the relationship is not disappearing altogether.

Netflix and Paramount have said through a joint statement that they will remain committed to releasing Ray Gunn and the untitled Jack and the Beanstalk project on Netflix, while continuing their broader content-licensing relationship.

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The deal may be closing, but the animated slate it created still has a few chapters left to play.

 The Netflix-Skydance partnership's first major release on the streamer was Vicky Jenson’s Spellbound, which arrived in 2024, two years after Skydance’s debut feature Luck had been released through Apple. The Netflix arrangement subsequently produced Nathan Greno’s Swapped (2026), which became a major streaming success, reportedly reaching 144.9 million global views in its first 90 days.

The next titles will keep the Netflix connection alive even after the broader pact ends. Brad Bird’s Ray Gunn, a science-fiction noir feature, remains committed to Netflix, as does Rich Moore’s untitled Jack and the Beanstalk adaptation.

Regardless, all of this leaves the partnership in an unusual position: the agreement itself is finished, but its final films are still moving toward audiences through the very streamer that helped define Skydance Animation’s second act. And with Skydance now operating within Paramount, the next phase of its animation strategy could look rather different from the one Netflix originally signed up for.

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What do you think of Netflix and Paramount calling off the Skydance animated film agreement? Let us know in the comments.