Epix Punches Netflix Ticket Deal

Deal Covers Movies 90 Days After Pay TV Debut

By Todd Spangler -- Multichannel News, 8/23/2010 12:01:00 AM

Netflix's billion-dollar deal with Epix, which adds more than 1,000 movies to its instant-streaming service, represents the service’s biggest threat yet to premium-movie packages sold by cable, satellite and telco TV operators.

Under the five-year output deal with Epix — widely reported to be worth close to $1 billion over that period — Netflix will have the rights to offer movies 90 days after they debut on Epix’s services. Titles will begin streaming from Netflix on Sept. 1 and will include movies from Paramount, Lionsgate and Metro-Goldwyn-Mayer, which are the partners in the Epix joint venture.

Netflix will be the exclusive outlet for Epix’s movies for two years, according to Epix president Mark Greenberg. Initially, Netflix will have access to about 1,000 library titles and will have rights to new releases 90 days after their Epix premiere. Studios historically have presold pay TV distribution rights for films for up to nine years after their theatrical release.

Separately, Netflix also has deals to stream movies and shows from Showtime Networks and Starz Entertainment, as well as a live feed of the Starz linear channel.

According to Epix’s Greenberg, the deal — with the 90-day buffer — will still preserve the premium TV and online window reserved for cable, satellite and telco television partners. Epix said it will make more than 3,000 movies available to subscribers this year.

“The opportunity we have with the cable industry in particular, that’s a 90-day advantage — it’s not day-and-date,” Greenberg said. “That’s big.”

Moreover, Epix is not branding a channel or the movies on Netflix as Starz has done. “Our approach with [Netflix] is as an outlet,” Greenberg said. “The branding remains proprietary to our cable, satellite and telco partners.”

Epix has distribution deals covering 30 million households for its linear TV service and online complement with Cox Communications, Charter Communications, Dish Network, Verizon’s FiOS TV, Mediacom Communications and the National Cable Television Cooperative.

Among the first movies from Epix in the Netflix queue will be G.I.Joe: The Rise of Cobra, The Curious Case of Benjamin Button and the three Godfather movies.

Under the Epix output deal, Netflix will have rights to stream the movies for up to 17 months, after which the window will move to basic cable networks.