Internet Video

Netflix Squeezes Pay TV With Epix Deal

8/10/2010 9:30 AM Eastern

Netflix, in another content deal that threatens to erode premium-movie packages from cable, satellite and telco TV, announced an agreement with Epix that will let Netflix members watch movies streamed over the Internet 90 days after they debut on Epix's services.

Movies under the five-year deal, reportedly worth about $1 billion over that period, will begin streaming from Netflix on Sept. 1 and will include movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer Studios, which are the partners in the Epix joint venture. Studios historically have presold pay-TV distribution rights for films for up to nine years after their theatrical release.

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.

Among the first movies 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.

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.

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 NCTC.

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 says 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."

Netflix, which now has more than 15 million subscribers, allows users to watch an unlimited amount of TV episodes and movies streamed over broadband to more than 100 "Netflix-enabled devices," including Microsoft's Xbox 360, Sony's PS3 and Nintendo's Wii consoles; Blu-ray disc players from Samsung, LG and Insignia; Internet TVs from LG, Sony and Vizio; the Roku digital video player; and TiVo DVRs.

 

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