The company hopes that two other things will act as barriers to entry: the size of its library and the efficiency of its distribution system.

ECONOMIST: Three-dimensional imaging

This includes distribution of current and library film and television product, formats and non-scripted programming in the pay, free, and basic cable television markets, as well as the domestic syndication of first-run syndicated TV programs, theatrical and TV movie packages.

ENGADGET: Netflix, NBC Universal content deal brings Battlestar Galactica, SNL and more to Watch Instantly

For Epix, which has struggled to gain carriage deals from traditional cable operators like Comcast and Time Warner Cable since its launch late last year, it provides both a cash infusion and another (markedly higher profile) distribution platform for an extensive library of flicks from its partners, Paramount, Lionsgate, and Metro-Goldwyn-Mayer.

FORBES: Netflix's Billion Dollar Bet

On the other hand, NetFlix is a formidable distribution channel for content providers as it has almost ubiquitous presence on devices, a large library, at a competitive price.

FORBES: NetFlix: Opportunity to Buy or Bail?

The deal with Twentieth Century Fox Television Distribution will also give LOVEFiLM members access to movies and TV series from the studio's library of much-loved titles, and will add to LOVEFiLM's already extensive TV catalogue.

ENGADGET: Lovefilm, Fox UK deal brings more TV shows next month, movie exclusives in 2013