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Amazon Signs ‘Epix’ Streaming Deal

4 Sep, 2012 By: Erik Gruenwedel

Ecommerce behemoth bumps Netflix as Epix’s exclusive SVOD partner.

Amazon Sept. 4 said it signed a distribution deal with multiplatform premium channel Epix enabling the e-commerce behemoth’s Prime members to stream more than 2,000 movies from Paramount Pictures, Lionsgate and MGM.

The three studios co-own Epix, which also distributes content through multichannel video distributors and online channels. The agreement marks a major achievement for Amazon Prime Instant Video, including doubling to 25,000 the number of titles available for streaming, and wresting Netflix’s previous exclusive deal with Epix.

The pact adds new releases such as The Avengers, Iron Man 2, The Hunger Games, Transformers: Dark of the Moon, Thor and Rango as well as popular favorites such as Kick-Ass, Paranormal Activity 2, True Grit, The Lincoln Lawyer and Justin Bieber: Never Say Never.

Epix also produces original programming, including comedy specials and concerts such as Kevin Smith: Burn in Hell and Usher: Live from London.

But it’s movies that feature prominently in the Amazon/Epix deal. That’s because feature films rate high with Prime members, according to Bill Carr, VP of video and music at Amazon.

“We are investing hundreds of millions of dollars to expand the Prime Instant Video library for our customers,” Carr said in a statement. “We have now more than doubled this selection of movies and TV episodes to over 25,000 titles in just under a year.”

The deal supplements Amazon’s recent streaming deal with NBCUniversal.

Meanwhile, Eric Wold, analyst with B. Riley & Co. in Los Angeles, said Netflix's non-exclusivity with Epix — while expected — amounts to a black eye for the SVOD pioneer as consumers have alternatives to stream The Avengers and The Hunger Games when they become available. He said that by offering Epix content on Amazon Prime, it dilutes the attractiveness of Netflix and could cause subscriber defection to other plans that are cheaper and/or offer other amenities (e.g., access to DVDs, free shipping on product purchases, etc.).

Wold also believes the anticipated launch of the joint venture between Redbox and Verizon was timed to take advantage of the Epix becoming more widely available.

"We continue to believe Netflix will have difficulty reaching its guidance of 7 million digital subscriber additions in 2012 or will need
to spend higher-than-expected amounts on marketing to drive that growth," Wold wrote in a Sept. 4 note. "Either way, this will likely strain U.S. profitability at a time when new international content commitments are increasingly being made with those profits." 

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