Amazon.com has struck a multiyear licensing agreement in the U.S. with Epix, the movie network from Paramount Pictures, MGM and Lionsgate, to stream thousands of movies after Netflix's exclusive online window with Epix expired in August.
Amazon's Prime Instant Video service -- available to subscribers of its Prime free-shipping membership program ($79 per year) -- will add new releases through the Epix deal such as Iron Man 2, Transformers: Dark of the Moon, Thor and Rango. Other titles set to premiere later on Epix include The Avengers and The Hunger Games, and Epix also will bring original programming to the Amazon service including comedy specials and concerts such as Kevin Smith: Burn in Hell and Usher: Live from London.
Netflix had two years as Epix's exclusive online video service distributor, under a deal signed in 2010 with Epix reported to be worth close to $1 billion over five years. Under that deal, Netflix had the rights to offer movies 90 days after they debuted on Epix's pay-TV services.
Netflix shares, which dropped as much as 11% on Tuesday after Amazon and Epix announced their agreement, closed down 6.4% for Sept. 4 to $55.93 per share.
Netflix CEO Reed Hastings downplayed the loss of the exclusive Epix content on the company's second-quarter 2012 earnings call last month. "We wouldn't expect to be affected significantly" if competitors add the Epix movie content, Hastings said. "Epix is not a particularly large source of total viewing. Much more of our viewing is on our exclusives [and such shows as] Mad Men [and] Breaking Bad."
With the Epix deal, Amazon's Prime Instant Video now stands at more than 25,000 movies and TV episodes available to watch with instant, unlimited streaming -- more than double the number of titles available since Amazon introduced the Kindle Fire tablet last September.
Among traditional pay TV providers, the Epix service is currently available to 30 million homes through distribution partners including Charter Communications, Cox Communications, Dish Network, Mediacom Communications, NCTC, Suddenlink Communications and Verizon FiOS.
"We are excited to be working with Amazon and to bring our compelling content to Amazon Prime and Kindle Fire customers," Epix president and CEO Mark Greenberg said in a statement. "This partnership is yet another great example of Epix's ability to broaden our reach through a digital platform, underscoring the incredible value of the Epix content offering."
Amazon's Prime Instant Video service is available on devices including PCs, Macs, iPads, Kindle Fire tablets, Roku set-tops, Xbox 360s and PlayStation 3s. The service is a subset of the more than 120,000 movies and TV episodes available on Amazon Instant Video, which includes new release movies and day after TV shows, for customers to rent or purchase.