Netflix Loses Another Round, This Time to Amazon
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Netflix Loses Another Round, This Time to Amazon

By Steven Lloyd Wilson | Trade News | September 5, 2012 | Comments ()


Ever heard of a company called Epix? No, no you haven't, you just googled it after I asked and then you claimed that you had in the comments because it makes you feel just ever so slightly better about your life if there's the chance that an anonymous reader on the Internet might be impressed with your level of knowledge.*


So this company called Epix is significant because it holds distribution rights to 3000 movies, including ones like The Hunger Games and The Avengers. Until now, Netflix had an exclusive deal such that only they were allowed to stream Epix movies through their service. That ended yesterday, as Amazon inked a deal with Epix to bring that pile of movies for free to Amazon Prime subscribers.

Apparently, contractual exclusivity was on the table when Netflix originally cut their deal with Epix, but they either couldn't afford it, or decided the price was too steep. The price for non-exclusivity was $200 million, and by the terms of that agreement, Netflix now gets a $50 million discount since Epix brought someone else on board. For their sake, I hope that's not store credit, since that never gets used and ends up forgotten at the bottom of a drawer in one's desk, along with emergency alcohol and unlabelled CDRs.

Netflix's stock dropped 6%, and I'm sure there are some acronyms that a knowledgeable person could attach to other numbers to emphasize financial badness.

On the other hand, Netflix insists this is no biggie, and claims that only 5% of their streaming is of Epix content anyway. But numbers are quite easy to play with. Stuff like The Avengers might only be 5% of their streaming titles for example, but that single stream probably adds more value to the subscription than a hundred episodes of "Jersey Shore." It's like saying it's no big deal if someone else nails your wife, since you only are actively having sex with her 5% of the time.

*I'm not judging, I've been writing here for over three years for exactly this reason.

(source: THR)

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