Netflix Secures Online Rights to More Movies

Netflix mailers on a conveyor i i

hide captionDVD-rental giant Netflix has worked to automate major portions of its shipping operations ...

Netflix mailers on a conveyor

DVD-rental giant Netflix has worked to automate major portions of its shipping operations ...

Cable TV, already under threat from Internet streaming, has just suffered another blow.

On Tuesday, Netflix and Epix, a start-up pay TV service backed by Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer, announced a deal that will give exclusive online rights to movies produced by those studios to the DVD rental company, starting Sept. 1.

Netflix already streams thousands of movies and TV shows and has been moving aggressively to add additional content. Under the terms of the deal, Netflix will offer its subscribers exclusive looks at Epix-controlled films for 90 days, following their runs on premium TV and video-on-demand. In exchange, Netflix will pay Epix close to $1 billion in licensing fees over five years, according to the Los Angeles Times:

The agreement would make Netflix, best known for its DVD-by-mail business, a potentially formidable competitor to Time Warner's dominant pay channel Home Box Office, which has movies from Warner Bros., 20th Century Fox and Universal Pictures. As more people watch Internet content on their televisions, Netflix has been investing huge amounts of money to acquire content for its streaming video service. It already has a deal with Liberty Media's pay channel Starz, which brings it movies from Walt Disney Studios and Sony Pictures. Netflix also recently acquired exclusive pay-TV window rights for films produced by Relativity Media.

The deal represents the latest in a series of steps Netflix has taken to shift from physical distribution of DVDs to streaming. The company recently began looking for an engineer to create an app for Android devices, according to PC World.

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