Published September 04, 2012
Amazon Inc (AMZN) and Epix struck a deal that doubles the number of movies in Amazon's library, ramping up the fierce competition with the likes of Netflix and Apple Inc.
The agreement allows Amazon Prime Instant Video subscribers access to such movies as "The Avengers," "Iron Man 2" and "The Hunger Games" from the Epix studio partners: Viacom Inc's Paramount Pictures, Metro-Goldwyn-Mayer Pictures, and Lions Gate Entertainment Corp.
The announcement on Tuesday comes as Epix's 2010 deal with Netflix, which pays $200 million a year for the rights to stream Epix movies to its U.S. customers, expires in this month.
Netflix shares were down 10 percent at $53.70 in morning trading.
"It gives Amazon Prime members a lot less reason to also have a Netflix subscription," R. J. Hottovy, an analyst with Morningstar, said of the Amazon-Epix deal.
A email sent to Netflix seeking comment was not immediately returned.
Amazon did not disclose the terms of the deal, but the company is "investing hundreds of millions of dollars to expand the Prime Instant Video library," Bill Carr, vice president of video and music at Amazon, said in a statement.
Apple was also circling Epix. Earlier this year Apple began talks with Epix as it builds out its content offering for its products, including a widely expected full-fledged TV set.
The deal with Epix, which brings Amazon's library to more than 25,000 titles, comes as Amazon is expected to unveil a new version of its Kindle Fire tablet this week.
Apple is holding a major event on September 12 and is expected to take the wraps off its latest iPhone.