Look Out, HBO — Netflix/Epix Deal Creates a Pay-TV Threat

ANALYSIS: Less than three years since the subscription rental company launched its streaming service with less than 2,000 titles of dubious quality, Netflix is clearly gambling that the future is digital

A new pact between cable channel Epix and Netflix to stream movies online makes the video rental giant a pay TV player, whether it admits it or not.

After Tuesday's agreement, Showtime and HBO should start looking over their shoulder, because make no mistake, Netflix is playing on their turf.

Under the agreement, Netflix subscribers will get to stream box-office hits such as "The Last Airbender" and "Iron Man 2" 90 days after their premium pay TV and subscription deals.

And Tuesday's move only builds on a similar arrangement the company made last month with Relativity, which gives Netflix the licensing rights to all movies on which Relativity controls distribution.

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