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Epix Punches Netflix Ticket Deal

8/23/2010 12:01 AM Eastern

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.

September