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Netflix Fights Back; Grows Streaming Library

Netflix announces a deal with Epix to expand its streaming content.

Netflix article updated with additional information on Netflix earnings report and its streaming library, and insight on competitor Coinstar.



) --


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announced a deal on Tuesday that will broaden its library of streaming movies. The news comes as the movie rental retailer struggles to maintain its superior footing.

Netflix entered into a multi-year deal with Epix, a joint venture between


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Metro-Goldwyn-Mayer Studios


Lions Gate Entertainment



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Netflix will begin streaming movies to customers on Sept. 1.

EPIX has subscription pay TV rights to new releases and movies from the libraries of its partners and will make these movies available to Netflix 90 days after their premium pay TV and subscription on demand debuts. Historically, the rights to distribute these films are pre-sold to pay TV for as long as nine years after their release.

The deal will nearly double the size of Netflix's streaming library, Citibank analyst Mark Mahaney estimates. Currently, Netflix has about 20,000 streaming titles, with only 9% of its most popular movies available via streaming.

Combined, Paramount, Lions Gate and MGM have about 20,000 titles, though it is unclear if all of these movies will be part of the EPIX deal, Mahaney wrote in a note.

The financial terms of the deal were not disclosed.

The deal comes on the heels of what was viewed by investors as a lackluster second-quarter report. While Netflix reported yet another record quarter when it comes to new subscribers and profit, it fell short of revenue forecasts. Investors also fear that its potential base for new subscribers is shrinking.

On top of this, rival


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, which owns Redbox DVD kiosks, is also stepping up its game. The company announced last week that it will expand its reach, rolling out kiosks in

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Last month, the company said it will begin offering Blu-ray DVDs for $1.50 a night in the fall. It has also previously been reported that Coinstar is looking into creating a streaming service.

This, no doubt, will directly hurt Netflix in some capacity, limiting its future growth.

-- Reported by Jeanine Poggi in New York.

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