Wednesday, August 11, 2010

Epix Distribution Through Netflix

Epix, the upstart premier movie service, has struck another deal. In a move that will help their bottom line, Epix is offering Netflix a window of films from the Epix film partners. "Wall Street analysts estimated that Netflix would pay about $900 million over the course of five years to Epix, a fledgling competitor to HBO that holds the rights to the film output of Paramount, Lions Gate and MGM."

Recently, Epix has struck deals with Charter and Verizon for carriage of its service. I wonder if those partners are happy with this new deal. In essence, it eliminates any competitive edge that cable was trying to have against Netflix. And most likely, it will also hurt Epix chance of carriage deals with Comcast or Time Warner, unless they feel the need to match the Netflix offering on their platform. Is Iron Man 2 enough of a draw?

"The two-year-old Epix is invisible to most consumers because some big companies like DirectTV and Comcast don’t carry it. But it is preserving the deals it does have by carving out a three-month TV window for films before they are available to Netflix subscribers." Is three months enough? And given how quickly movies are moving through the distribution pipeline, new movie premieres are coming monthly and causing consumers to quickly forget the ones before it. Perhaps that consumption pattern will make this new deal with Netflix a non issue for the cable providers. It's becoming a very competitive marketplace and that tends to be better news for the end consumer.

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