Amazon (NASDAQ; AMZN)
has signed a licensing deal with cable channel
- a move that has far-reaching implications that are impacting a
number of stocks today.
For starters, the move is a coup for Amazon.
Epix used to have a streaming agreement with
that allowed the online video giant to exclusively distribute its
library of movies and TV shows. Now that Epix's agreement with
Netflix has ended, Amazon has swooped in to sign a licensing deal
that gives it rights to a number of big-ticket items.
Epix is jointly owned by
Lions Gate Entertainment
Viacom's (NASDAQ; VIA)
Paramount Pictures and MGM - three of the most productive,
renowned movie studios in the world. So the company's licensing
deal with Amazon allows Amazon to distribute recent smash-hit
blockbusters such as "Iron Man 2", "
" and "The Hunger Games."
Those titles and hundreds of other Epix-owned properties will
now be available to those who subscribe to Amazon Prime, an
annual membership program that costs $79 a year.
The new licensing deal is great news for Amazon, Lions Gate
and Viacom shareholders. Lions Gate shares are already getting a
nice little pop, rising 3.2% this morning to continue a torrid
2012 in which the stock has gained 80% thanks in part to its
March release of "The Hunger Games" movie.
Amazon and Viacom shares are actually down slightly, along
with the rest of the market. But the new distribution deal should
only help both businesses going forward.
Netflix, meanwhile, is taking it on the chin after essentially
losing Epix to a competitor.
NFLX shares had fallen 7% as of 12:15 p.m. eastern time today.
The stock is now down nearly 24% for the year.
Netflix still dominates both the online streaming and
video-by-mail businesses, however. As of May, Netflix still held
a 61% share of the U.S. online streaming market, and the company
is rapidly expanding into Canada, South America and other corners
of the globe.
So the Amazon-Epix licensing deal isn't the end of the world
for Netflix or its investors.
The onus is still on Amazon to prove that its Amazon Prime
setup - a far more expensive proposition than the cost of
subscribing to Netflix even after the company infamously raised
prices 60% - can compete with the streaming video giant.