Netflix and Epix strike programming deal

Netflix shares were up about 6.2 percent at $124.15 on the NASDAQ in midday trading.

The deal makes Netflix the exclusive Internet-only distributor of movies from Paramount Pictures, Metro-Goldwyn-Mayer Studios and Lions Gate Entertainment Corp, a library that includes Iron Man and the Saw franchise.

The films will be available 90 days after their premium pay TV and on-demand debuts.

Epix is owned by Viacom Inc and its Paramount Pictures unit, Lions Gate and MGM.

The financial terms of the deal were not disclosed though a source familiar with the arrangement said the agreement runs for five years and is worth close to $1 billion.

J.P. Morgan analyst Imran Khan wrote in a note the deal is a positive for Netflix because the increased availability of streaming content will help prevent subscriber turnover.

Lions Gate said during an earnings call on Tuesday the agreement with Netflix makes Epix immediately profitable.

Lions Gate executives said the 90 day window in the Netflix agreement was set to protect its cable partners.

Epix is available in over 30 million homes through carriage agreements with Verizon Communications Inc FiOS, Dish Network Corp, Cox Communications and Mediacom Communications Corp, among others.

(Reporting by Jennifer Saba and Yinka Adegoke; editing by Derek Caney, Dave Zimmerman editing by Andre Grenon)