Netflix has signed a five-year-deal with pay-TV channel Epix that will give Netflix exclusive online streaming rights to new releases from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer 90 days after their premium-pay TV and on-demand debuts.
The deal, estimated to be worth about $1 billion to Epix over five years in licensing fees, kicks off next month.
With the flood of new movies available to it, Netflix has become a much more serious force in the video on demand world, going head-to-head with cable channels like HBO. It also shakes off the baggage of only offering "B titles" on its streaming service.
The L.A. Times points out that Netflix already has a deal with pay-channel Starz for movies from Disney and Sony Pictures, and has an exclusive agreement with Relativity Media. Epix, launched last year as a partnership between Viacom, MGM and Lionsgate, has had limited success carving a niche for itself in the pay-TV market, striking deals with Charter, Dish, Cox, Verizon, and other smaller operators.
Netflix has seen increasing numbers of its 15 million subscribers choose to stream video, rather than opt for the company's DVD-by-mail program; it reported 61 percent of subscribers were streaming video compared to just 55 percent in the previous quarter. And, despite strong subscriber growth in the second quarter, Netflix said it would be hard pressed to duplicate the 34 percent bump in earnings it saw in Q2.
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