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Netflix would like to carry Epix, HBO, Showtime

Thu Jul 23, 2009 9:14pm EDT

By Sue Zeidler

LOS ANGELES, July 23 (Reuters) - Netflix Inc (NFLX.O), moving aggressively to deliver films via the Web, would like to distribute Epix, a new joint venture cable channel being launched by Paramount, Lions Gate Entertainment (LGF.N) and MGM, and other movie channels like HBO and Showtime.

"Certainly Epix, which has a lot of great content is something that we would like to carry, but at this point we don't have anything to announce," said Netflix Chief Executive Officer Reed Hastings on a conference call.

A spokesman for Epix, aiming to provide new films, catalog titles and original content over a variety of platforms, including TV, computers and mobile devices, declined comment.

Industry insiders have been waiting for Epix to soon announce a carriage agreement with a cable or satellite distributor, and a source familiar with the venture said on Thursday such an agreement could be announced within weeks.

One analyst on the Netflix conference call on Thursday asked Hastings if Netflix viewed Epix, which is expected to offer a streaming component, as competition.

"Epix's plans are a little unclear to everyone in terms of for example, pricing, so we'll really have to see," Hastings said, noting Starz Entertainment LLC also offered their own streaming subscription service for a while, but then discovered it could make more money wholesaling that service to a range of players including Netflix.

In September, Netflix said it would offer 2,500 titles from Starz' broadband subscription service to its Web streaming service. This is a major milestone for Netflix in its efforts to license newer content for its "Watch Instantly" streaming service, which offers viewing from a library of over 12,000 titles, most of which are older releases.

In an interview after the call, Hastings said he would like more deals like the Starz deal.

"We're paying Starz a lot of money. We'd love to have HBO, Showtime and Epix in our space as well. Our job is one-fourth complete," he said.

Netflix and other fledgling online video providers have been struggling to obtain subscription rights for digital delivery from Hollywood studios, particularly for newer films.

Starz, a unit of Liberty Media Corp(LINTA.O), made an investment in rights to offer subscription movies across all electronic delivery platforms for its "Starz Play" broadband service and is now selling the service through affiliate partnerships like Netflix and one with Verizon Communications.

When asked on the conference call when Netflix would need to renew its Starz deal, Hastings said: "When we extend or renew that contract in the future, hopefully we'll be a lot bigger and we'll be able to pay them more money," he said.

"Part of our goal in life is making subscribers really happy, but part of it is also making content suppliers happy and we definitely look forward to being able to pay them more money and still grow our profits over time."

Reed said it was a multi-year agreement, but would not disclose any more than that in terms of timing.

Paramount is a unit of Viacom Inc (VIAb.N)

MGM is owned by a consortium of companies, including private equity firms TPG Capital LP and Providence Equity Partners, Sony Corp (6758.T) and Comcast Corp (CMCSA.O). (Editing by Carol Bishopric)
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