Netflix shares rise 6% on Epix deal

chart_ws_stock_netflixinc.top.pngShares surged 6% on Tuesday. To see more about the stock's performance, click on the chart. By Annalyn Censky, staff reporter


NEW YORK (CNNMoney.com) -- Shares of Netflix surged more than 6% Tuesday, after the company announced an agreement with pay-cable movie channel Epix to stream films online from three major movie studios.

The deal gives Netflix (NFLX) exclusive rights to both new releases and older films from Paramount, Lionsgate and MGM on its site 90 days after Epix first debuts the films to its premium pay and on-demand TV subscribers. Netflix members will get access to the films starting Sept. 1.

Netflix shares rose 6.6% to $124.41 in midday trading. The stock has been on a tear this year, crossing $100 for the first time back April after the company reported a phenomenal first quarter. Its second quarter wasn't as fantastic but investors still like the stock, sending shares up 19% just in the past 5 days.

The deal significantly expands Netflix's online content, as competitors like Coinstar's (CSTR) Redbox and Wal-Mart (WMT, Fortune 500) also look to add streaming services down the road, and HBO, Hulu and Apple's (AAPL, Fortune 500) iTunes build their online content.

"The Epix deal is an example of the innovative ways in which we're partnering with major content providers to broaden the scope and freshness of choices available to our members to watch instantly over the Internet," said Netflix chief content officer Ted Sarandos, in a statement.

The 5-year deal is expected to bring Epix about $1 billion in licensing fees, according to published reports. Lionsgate Chief Executive Jon Feltheimer wouldn't confirm exact numbers Tuesday, but in a call with investors he said the reported figure was in the "ball park."

Lionsgate (LGF), Paramount's parent company Viacom (VIA) and Metro-Goldwyn-Mayer Studios (MGM, Fortune 500) launched Epix in 2009. Cable and satellite providers Cox Communications, Dish Network, Mediacom and Verizon FiOS currently offer the start-up channel. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,098.45 18.88 0.11%
Nasdaq 4,580.27 22.58 0.50%
S&P 500 2,003.37 6.63 0.33%
Treasuries 2.34 0.01 0.39%
Data as of 5:22am ET
Company Price Change % Change
Bank of America Corp... 16.09 0.08 0.50%
Apple Inc 102.50 0.25 0.24%
Intel Corp 34.92 0.27 0.78%
Facebook Inc 74.82 0.96 1.31%
General Electric Co 25.98 -0.03 -0.12%
Data as of Aug 29

Sections

Union organizers say that fast food workers will strike in more than 150 cities on Thursday. Workers want a $15 minimum wage and protection from retaliation by employers. More

Gas prices are falling to nearly $3 a gallon in some parts of South Carolina, and that will soon be common in much of the country. More

Xiaomi is beating Apple and Samsung in China and 'selling a dream' as it bids for world smartphone domination. More

The Coolest Cooler is the most successful Kickstarter campaign in the site's history, raising $13.3 million from over 62,000 backers. More

Five CNNMoney readers share stories about saving that you can learn from: What they would do differently if they had another chance. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.