09/04/2012 10:04 am ET Updated Nov 04, 2012

Amazon, Epix Strike Movie Deal; Netflix Contract About To Expire

(Corrects deal's mpact on Amazon video library in 1st paragraph; deal adds about 3,000 movies, does not double the library)

* Deal adds about 3,000 titles to Amazon streaming video library

* Amazon's Prime Instant Video library has doubled in about a year

* Deal comes as Netflix exclusive agreement with Epix set to end

* Shares of Netflix fall

Sept 4 (Reuters) - Amazon Inc and Epix struck a deal that adds about 3,000 movies to Amazon's video streaming library, ramping up competition with the likes of Netflix and Apple Inc.

The agreement gives Amazon Prime Instant Video subscribers access to such movies as "The Avengers," "Iron Man 2" and "The Hunger Games" from Epix studio partners: Viacom Inc's Paramount Pictures, Metro-Goldwyn-Mayer Pictures, and Lions Gate Entertainment Corp.

The announcement on Tuesday comes as Epix's 2010 deal with Netflix, which pays $200 million a year for the rights to stream Epix movies to its U.S. customers, expires in this month.

Netflix shares were down 7.8 percent at $55.03 in afternoon trading.

"It gives Amazon Prime members a lot less reason to also have a Netflix subscription," R. J. Hottovy, an analyst with Morningstar, said of the Amazon-Epix deal.

A email sent to Netflix seeking comment was not immediately returned.

Amazon did not disclose the terms of the deal, but the company is "investing hundreds of millions of dollars to expand the Prime Instant Video library," Bill Carr, vice president of video and music at Amazon, said in a statement.

Apple was also circling Epix. Earlier this year Apple began talks with Epix as it builds out its content offering for its products, including a widely expected full-fledged TV set. .

The deal with Epix, which brings Amazon's library to more than 25,000 titles, comes as Amazon is expected to unveil a new version of its Kindle Fire tablet this week.

Apple is holding a major event on Sept. 12 and is expected to take the wraps off its latest iPhone. (Reporting By Jennifer Saba and Liana Baker; Editing by Maureen Bavdek and John Wallace)



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