Inch by inch the era of streaming internet movies comes closer, and one particular inch spanned this week was the deal that gave Netflix access to three movie libraries, including new releases 90 days into their pay TV window, from Paramount, Lionsgate and MGM.
Right now I wouldn’t give you ‘tuppence’ for the new outputs of MGM, but the other two are an entirely different prospect. MGM is mostly a library of about 8,000 movies, many of them very old, a handful of them quite recent. It is controlled by a group of investors, including Sony, and is a great way of filling out an online service with an immediate list of classic movies.
The deal has been done directly with Epix, which has subscription pay TV rights for the three studios and is owned by them. In the past, Netflix says, the rights to distribute these films have been pre-sold to pay TV for as long as nine years after their theatrical release.
It used precisely the same wording about pre-selling to pay TV, when it signed a deal in early July with Relativity Media under which major theatrically released films owned by Relativity will be licensed directly and exclusively to Netflix for streaming to its subscribers during the pay TV window. That deal included films like The Fighter, Skyline, Season of the Witch and Movie 43.
Netflix announced figures last week that took it past 15 million paying subscribers so it is big enough to unhook films like this from traditional pay TV channels. Now Netflix is anxious to build as big a library of deals of this type, so that it can become the only US operation able to bring modern films across the internet.
Content owners in the US have been pushing back at companies like DVD kiosks firm Redbox, and by association Netflix, over the dates when they first get content, trying to retain a pay per view window among cable and pay TV operators, as well as a DVD sales window before online and DVD rental can be triggered. Netflix is perhaps responding to that with an increasingly fat wallet and a predictable future revenue stream. The LA Times in reporting this deal said that this deal alone with Epix was likely to yield $1 billion over its lifetime.
Epix has made over 3,000 movie titles available to subscribers this year and reached 30 million homes through carriage agreements with Verizon FiOS, Dish Network, Cox Communications, Mediacom Communications, Charter Communications and NCTC. Well now you can cancel your cable subscription and watch them on Netflix.
While we have frequently asked who in the US needs more than Hulu and Netfix, the Netflix online service really doesn’t have many up to date film offerings, though it does better than most online services. And this deal might easily make a considerable difference.