Amazon Signs New Streaming Deal with Epix; Could Hurt Netflix
October 9, 2012 4:47 PM
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Epix will provide Amazon with about 3,000 more movies to the Prime Instant Video catalogue
Amazon is shelling out a considerable amount of cash to make sure its Prime Instant Video Service continues to stay competitive with Netflix via
a new contract with Epix
Amazon is shaking up the pricing model for licensing agreements with movie/TV studios. It recently agreed to pay Epix -- a partnership between Metro-Goldwyn-Mayer, Lionsgate and Paramount Pictures -- an earn-out provision if the number of Amazon Prime Instant Video subscribers increases above a certain point. This payment will be dished out over time as subscribers grow, and is in addition to the usual fixed upfront fee.
Generally, services like Netflix only agree to a fixed upfront fee with movie/TV studios when it comes to content licensing. However, studios realized that they want to be in on any future growth that may occur with video streaming services.
Epix isn't the only one who will benefit from such a deal model. Amazon has now given studios a reason to want to do business with them instead of bigger services like Netflix. As of now, Netflix has about 25 million subscribers in the United States while Amazon Prime Instant Video has about 3-4 million. Also, Amazon Prime Instant Video only has about 25,000 titles to offer while Netflix has double that. In other words: Amazon could really use the boost.
Epix will provide Amazon with about 3,000 more movies to the Prime Instant Video catalogue. Epix previously had a contract with Netflix for $200 million a year, but once that agreement ended, Amazon snuck in with the new deal.
Amazon really needs deals such as the one with Epix in order to boost its profit margins where
the Kindle Fire
is concerned, too. Amazon is selling the Fire at a discount with hopes that customers will use it to consume books, TV, movies and shopping through the e-tailer's services -- which makes up for the loss on selling the device at $199.
Since 2011, Amazon has announced new streaming deals with companies like NBCUniversal and ABC.
Amazon and Epix
announced their agreement last month
, but the pricing model details were just recently released.
This article is over a month old, voting and posting comments is disabled
Epix needs to wake up
10/10/2012 3:51:34 AM
People don't want to pay for two subscriptions. Most people didn't want to pay for both an xbox 360 and a ps3 (when those consoles launched) either. You can make more profit offfering your goods on two services at a slightly lower price than you can from offering it on one service via a higher price.
Stop discriminating against netflix.
RE: Epix needs to wake up
10/10/2012 9:17:55 AM
That and people don't want to change the way they watch TV everytime a new service comes out. Netflix is on both my BluRay players, my TV, all three of my Tablets, WP7, and iPhones. Get the same for Amazon and I will consider switching.
RE: Epix needs to wake up
10/10/2012 10:01:27 AM
Exactly correct here.
All my blue ray players, media streamers, tv's, etc.. support Netflix right now.
Not all of my devices support Amazon and I am not investing in more hardware either.
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs
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