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Netflix says it’s not renewing a distribution deal with cable network Epix, which means its U.S. subscribers will lose access to big Hollywood movies like “Hunger Games: Catching Fire,” “World War Z” and “Transformers: Age of Extinction” at the end of September. The trade-off, says Netflix: It is making its own movies — but subscribers will have to wait a while to see most of them.
Epix is a joint venture of MGM, Lions Gate Entertainment and Viacom’s Paramount. Netflix signed on with the pay TV network five years ago, but it hasn’t had exclusive streaming rights for those studios’ films since 2012, when Amazon signed its own Epix deal.
Industry sources say Epix is likely to replace Netflix with a distribution deal with Hulu, the Web video service co-owned by Fox, Disney and Comcast’s NBCUniversal. (Update: That deal is official now and effective Oct. 1, per a press release: “At launch, blockbuster films such as ‘Hunger Games: Catching Fire,’ ‘Transformers: Age of Extinction,’ ‘Teenage Mutant Ninja Turtles,’ ‘Star Trek: Into Darkness,’ ‘World War Z,’ ‘Wolf of Wall Street,’ ‘Jack Ryan: Shadow Recruit,’ ‘Robocop,’ ‘God’s Not Dead’ and more will become available to Hulu subscribers for the first time.”)
“We’ve enjoyed a five-year partnership with Epix, but our strategic paths are no longer aligned,” Netflix content boss Ted Sarandos said in a statement. “Our focus has shifted to provide great movies and TV series for our members that are exclusive to Netflix. Epix’s focus is to make sure that their movies will be widely available for consumers through a variety of platforms.” There’s more from Sarandos in a blog post.
In the last few years, Netflix has been emphasizing stuff that you can get only on its service. It has laid out big bucks for an exclusive deal with Disney, which kicks in next year and will include its new “Star Wars” movies, as well as titles from Pixar and Marvel. And it has been spending an increasing amount of money on original TV shows like “House of Cards.”
Netflix has also started to get its feet wet with its own movies. Some of those will appear in theaters at the same time they debut on the streaming service, and others will go directly to Netflix.
But the home-grown movies Netflix has announced so far are no “Transformers” or “Hunger Games.” They include “Beasts of No Nation,” an “unflinching war drama”; four new movies from Adam Sandler; and a new mockumentary from Christopher Guest, the director behind “A Mighty Wind” and “Waiting for Guffman.” All may appeal to different niches, but are unlikely to be big crowd-pleasers.
Still, this would have been a much bigger deal for Netflix to lose a few years ago — like it was in 2011, when it lost its deal with the Starz pay TV network. But back then it didn’t have a track record when it came to original content. Now, it is cranking out stuff on a regular basis.
The bigger issue for Netflix will be if Hollywood studios and the networks that work with them start to cut off access to TV reruns, which remain crucial for the service.
Many people in the TV/movie/video world believe that one of the reasons TV ratings have nose-dived in the last year is that viewers are watching old TV shows on Netflix instead of watching new ones on TV. Some people want the studios and networks to stop selling their old shows to Netflix.
That appears unlikely to happen — at least all at once. But you can see signs of that strategy around the edges. Earlier this year, for instance, Fox announced it was selling reruns of its hit show “Empire” to Hulu.
Netflix would have certainly been interested in buying that show for its own viewers, but people familiar with the situation say Fox never even let them bid on that.
This article originally appeared on Recode.net.
