Netflix shares plunge after rival Amazon signs streaming deal

 
City A.M. Reporter
SHARES in Netflix plunged as much as 11 per cent yesterday on back of news that rival Amazon had struck a three year deal with video streaming channel Epix to add about 3,000 movies to Amazon's video streaming library.

The deal will boost Amazon’s Prime Instant Video service, a streaming service for subscribers, from its current title count of 22,000 to more than 25,000.

The deal gives Amazon video subscribers access to movies such as Iron Man 2 and The Hunger Games from Epix's Hollywood studio owners. Netflix has been paying $200m (£158m) a year since 2010 for exclusive rights to Epix movies but the deal expires this month.

"It gives Amazon Prime members a lot less reason to also have a Netflix subscription,” a Morningstar analyst said.

Netflix shares fell 6.3 per cent to close at $55.93, with the stock dropping as low as $53.13.