Shares of Netflix surged more than 6 percent Tuesday, after the company announced an agreement with pay-cable movie channel Epix to stream films from three major movie studios online.

The deal gives Netflix exclusive rights to stream both new releases and older films from Paramount, Lionsgate and MGM on its site 90 days after Epix first debuts the films to its premium pay and on-demand TV subscribers. Netflix members will get access to the films starting Sept. 1.

Netflix shares were up 5.6 percent to $123.47 in mid-day trading Tuesday following the announcement.
The deal significantly expands Netflix’s online content, as competitors like Coinstar’s Redbox and Wal-Mart also look to add streaming services down the road, and HBO, Hulu and Apple’s iTunes build their online content.

“The Epix deal is an example of the innovative ways in which we’re partnering with major content providers to broaden the scope and freshness of choices available to our members to watch instantly over the Internet,” Ted Sarandos, chief content officer for Netflix, said in a statement.

The 5-year deal is expected to bring Epix about $1 billion in licensing fees, according to published reports. Lionsgate Chief Executive Jon Feltheimer wouldn’t confirm exact numbers Tuesday, but in a call with investors said the reported figure was in the “ball park.”

Lionsgate, Paramount’s parent company Viacom and Metro-Goldwyn-Mayer Studios launched Epix in 2009. Cable and satellite providers Cox Communications, Dish Network, Mediacom and Verizon FiOS currently offer the start-up channel.