Netflix, the world's largest online movie rental service, announced it has acquired all North American rights to Sherrybaby, a buzz-maker at this year's Sundance Film Festival. The film, written and directed by Laurie Collyer, features a critically-acclaimed lead performance by Maggie Gyllenhaal.

The Sherrybaby deal includes theatrical, DVD, television and download rights and will be released through Netflix' newly created Red Envelope Entertainment group. Netflix has inked an agreement with IFC Films to handle the U.S. theatrical distribution, currently scheduled for an August 25, 2006 release date. The film will be available at www.netflix.com on November 7, 2006.

Sherrybaby received critical acclaim at Sundance based on the gripping performance of Ms. Gyllenhaal, who portrays a young woman (Sherry) struggling to keep her life on the right track. Recently released from prison with dreams of getting a job, settling down, and being a mother to her five-year-old daughter, Sherry encounters problems when she realizes her brother and his wife are invested in raising the child themselves. The constricting realities of unemployment and parole complicate things even more. The film is produced by Mr. Turtletaub of Big Beach and Lemore Syvan of Elevation Filmworks. Los Angeles-based Katapult Film Sales holds the international rights.

Related: Netflix Blames Subscriber Loss on Price Hikes and Content Slate

Gyllenhaal will be seen later this year in Oliver Stone's

Cinemark Movie Club