Published On: February 1, 2009

Paramount, MGM & Lionsgate Looking at Epix To Compete With Netflix and iTunes

Published On: February 1, 2009

Paramount, MGM & Lionsgate Looking at Epix To Compete With Netflix and iTunes

In an effort to stave off the complete and utter domination of Netflix and iTunes, movie studios, specifically Paramount, MGM, and Lionsgate, are turning to Epix for help, beginning with The Curious Case of Benjamin Button.

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With the success of Netflix in the forth quarter of 2008, it comes as no surprise that other home video and home entertainment companies are willing to test out new delivery options for selling movies and content to consumers. New to the scene is Epix, a premium movie channel from Studio 3, a joint venture between Paramount Pictures, MGM and Lionsgate, which promises exclusive content delivered to subscribers via the web starting in May 2009. Slated to be a traditional TV channel, Epix is choosing to debut on the Internet early as it does not have finalized distribution agreements with cable and satellite companies.

Kicking off with distribution of The Curious Case of Benjamin Button, Iron Man, and other popular films from the libraries of the three studios, there will be a reported 15,000 titles available from the combined libraries. As Netflix has much, if not all, of their popular titles available for rent now, and have been making more titles available through their "Watch Instantly" function, it will be a challenge for Epix to lure new subscribers to their site from an established, successful model with much more selection.

Another problem Epix faces is that they call their content "exclusive". In order to have sole distribution on their library, would they request Netflix to cease offering their older films for rent? That does not seem likely, as they would bite the hand that feeds them millions in DVD purchases per year. It is also difficult to imagine that they would not offer their new releases to Netflix either. Forgoing the income from rentals does not seem like a sound business idea for the three studios so they will need to come up with a strategy for this competition for their films. Epix has stated that they will produce original television shows, present live concerts and comedy shows, however, so perhaps that is their "exclusive" content.

There is also no word on if the streaming videos would be in high definition. That could seriously inhibit customers from subscribing to their online channel. Epix is being billed as a competitor to HBO and Showtime, yet there is reportedly little interest from cable and satellite companies despite a planned roll out to television screens in October of this year. Considering the success of Hulu, YouTube, and Netflix, online may be a great vehicle for their idea and to show the cable and satellite companies their consumer demand and reach, despite the company stating that it is not their primary business model.

If this is a marketing attempt to hook customers early, an logical price for early subscribers would be $5 per month, or even free, to attract the numbers needed to predict long term viability and to secure contracts with the cable and satellite companies.

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