Wednesday, September 5, 2012

Netflix, Inc. (NASDAQ:NFLX) Faces Competition from Amazon-Epix Deal – NFLX, AMZN

Streaming video services provider Netflix, Inc.(NASDAQ:NFLX) had better start getting worried. On Tuesday internet retailer Amazon.com, Inc.(NASDAQ:AMZN) announced a licensing deal with Epix to provide a whole library of movies and music.

Amazon is providing the service through its Prime Instant Video Service that was set up for this special purpose. The current deal will double the online retailer’s movie library and give users of its Kindle e-reader and Kindle Fire tablet more entertainment options. It may be recalled, that Amazon plans to launch an upgraded version of its Kindle Fire, after announcing that the previous version had sold out.

Netflix, of course, had the first mover advantage and so long as the company kept its services at $8 a month the company maintained its popularity. However, in between, it raised the prices of its DVD rentals and video streaming services creating an uproar from loyal users.

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Apart from the ricing debacle the company made some other changes that have had an adverse impact on its share price. That, combined with some other decisions the company made, sent the share price plummeting. There also have been complaints from users about its movie library and the ratio of quality, name brand movies to B-movies is less than stellar.

This new deal between with Epix gives Amazon gives access to blockbuster hits such as “Hunger Games”, “Avengers”, “Iron Man 2”, and others.
Epix is owned by Lions Gate Entertainment, Viacom's Paramount Pictures and MGM, which in turn own a wide variety of popular movies.

"We are investing hundreds of millions of dollars to expand the Prime Instant Video library for our customers," Amazon’s Bill Carr told the Wall Street Journal. "We have now more than doubled the selection of movies and TV episodes to over 25,000 titles in just under a year."

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