The rumoured Netflix deal to expand its library of streaming movies is now official.
Netflix just announced that it has signed a deal with EPIX to stream “an array of new releases and library titles” from Paramount, Lionsgate, and MGM.
rumours circulating yesterday put the deal at $1 billion for five years, but the announcement avoids getting into specifics, saying only that it is a “multi-year deal.”
This is a big move for Netflix. Streaming is the company’s growth area, and is a much higher margin business than mailing DVDs. The company recently expanded its streaming operation to Canada, and is expected to continue moving into foreign markets.
The big problem so far has been that the library of movies available to stream simply hasn’t been that deep or good. This should go a long way toward correcting that.
The deal grants exclusive online rights to the movies in question, making it even harder for anyone to compete with Netflix in this arena.
Read the release below:
EPIX AND NETFLIX ANNOUNCE EXCLUSIVE INTERNET-ONLY DEAL TO INSTANTLY STREAM EPIX MOVIES TO NETFLIX MEMBERS
NEW YORK and BEVERLY HILLS, Calif., August 10, 2010 – EPIX™ and Netflix, Inc. [NASDAQ: NFLX] today announced an agreement through which Netflix members can instantly watch an array of new releases and library titles from EPIX streamed over the Internet from Netflix. Movies from the multi-year deal will begin streaming from Netflix on September 1 and include movies from Paramount, Lionsgate and MGM.
EPIX has subscription pay TV rights to new releases and movies from the libraries of its partners and will make these movies available to Netflix 90 days after their premium pay TV and subscription on demand debuts. Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their theatrical release.
For Netflix, the agreement is a significant step in building the company’s streaming offer, adding many popular movie titles from some of the world’s leading studios. It adds meaningfully to a growing library of movies and TV shows that can be watched instantly on TVs via a range of leading consumer electronic devices capable of streaming from Netflix and on computers.
For EPIX, the deal reflects the value of the EPIX platform which, from its start, has provided new rights and flexibility for the distribution of its movies. The agreement allows EPIX to continue the distribution of popular content on a variety of platforms and preserve the premium television, subscription on demand and online window reserved for cable, satellite and telco television partners.
“Adding EPIX to our growing library of streaming content, as the exclusive Internet-only distributor of this great content, marks the continued emergence of Netflix as a leader in entertainment delivered over the Web,” said Ted Sarandos, chief content officer for Netflix. “The EPIX deal is an example of the innovative ways in which we’re partnering with major content providers to broaden the scope and freshness of choices available to our members to watch instantly over the Internet.”
Mark Greenberg, president of EPIX, added: “Netflix is an incredibly popular service and we welcome them as our newest distribution partner. We are pleased to be able to continue our mission of bringing consumers the movies where they want to watch them, while satisfying the differing needs of cable, telco and satellite operators. This deal also underscores the tremendous value of our offerings in the marketplace.”
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