Netflix, Inc. NFLX has made yet another strategic move in the video streaming market. The company recently announced that it will be parting ways with cable network Epix after the existing deal expires in September.

Netflix’s deal with Epix was not exclusive, that is, all these movies were also available on other platforms. Further, with the company becoming more focused on original content, the deal is not as significant as it used to be.

The company’s upcoming movies include Beasts of No Nation (set to be released in October), Ridiculous Six and A Very Murray Christmas (both in December). Additionally, in 2016, Netflix viewers will get to see the novel action movie Crouching Tiger, Hidden Dragon: Green Legend.

It seems that Netflix is taking a two-pronged approach to drive growth. On the one hand, it is expanding aggressively while on the other it is focusing on the production of original content by ramping up its office and production facilities.

Last week, Netflix had announced its plans to move its operations from Beverly Hills to Los Angeles so as to have a more direct presence in Hollywood. The Zacks Rank #3 (Hold) company has leased a huge 200,052 square feet office space at the ICON office tower in Sunset Bronson Studios, which is expected to be operational in early 2016.

This apart, in 2016, Netflix will get exclusive rights to The Walt Disney Company’s DIS Pixar, Lucasfilm and Marvel productions. This is significant for Netflix as it will enable the company to feature the movies earlier than before. Moreover, the company will be the sole platform on which shows like Star Wars will be available. Additionally, Netflix will get access to the Marvel cinematic universe and Pixar animated filmography.

While the exit from the Epix deal is a bit disappointing for its customers, Netflix seems well positioned to compensate for the loss. Also, Epix which is jointly owned by Viacom, Inc.’s VIA Paramount Pictures, Metro-Goldwyn-Mayer and Lions Gate Entertainment Corp. LGF has signed a new deal per which all its movies, which are not being streamed via Netflix, will be available on Hulu from Oct 1.

We believe that the company still has an edge over its peers given its well-diversified content portfolio (and growing markets) which is leading to significant subscriber growth while also improving the retention of existing customers.

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