Netflix to vastly expand online movie catalog via Epix

Netflix and Epix have agreed upon a new online movie distribution deal that will bring movies from the joint-venture founded by Lions Gate Entertainment and Viacom.

This is an important deal for Netflix subscribers, because it realistically opens up the door to have some 28-day movie rental windows removed.  An online EpixHD service and cable channel are currently available, but neither service has received much fanfare.

Netflix to vastly expand online movie catalog via Epix

“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 Netflix Chief Content Officer Ted Sarandos in a statement.

The Epix HD initiative was founded last year by Paramount, MGM, and Lionsgate, with a continued stake available with Viacom.  By the end of the summer, only 3-to-4 million subscribers will have access to the Epix channel — and it still isn’t available through Comcast, DirecTV, and other major broadcasters.

The deal was first rumored yesterday, with anonymous sources indicating a deal would be announced shortly.  As mentioned in the Los Angeles Times, the deal could be valued as high as $1 billion over the next five years, but Epix and Netflix won’t disclose the financial details.

Epix has struggled to compete with rivals, and has largely gone unnoticed by consumers, but this deal should help both sides involved in the agreement.  Analysts expect similar deals to be made in the future, with alliances and partnerships expected to be important for overall longevity.

Meanwhile, Netflix has had to agree to custom rental distribution agreements with Fox, Warner Brothers Home Entertainment, Universal Studios, and other movie studios.

Netflix will likely continue to look for content distribution deals to ensure subscribers have access to the latest films over their instant viewing online streaming service, rather than prioritizing DVD and Blu-ray movies.  The company announced a planned Canadian takeover, and will face online competition from Redbox in the future.

Epix is expected to find its way to larger cable and satellite providers, but this deal with Netflix could further complicate their negotiations with television service providers.