The arrangement more than doubles Amazon Prime Instant Video’s offerings, and knocks some of the wind out of its chief competitor: Netflix. The streaming video company’s shares were down about 10% shortly after the market opened this morning. Epix’ new agreement with Amazon comes just days after the premium movie service’s exclusivity arrangement with Netflix expired. Films from Epix — backed by Paramount, MGM, and Lionsgate — will now appear on Amazon and Netflix about 90 days after they run on traditional pay TV. Epix’ announcement also comes just before Amazon’s press conference on Thursday where it’s expected to unveil a new line of Kindle Fire tablets — possibly including a model with an 8.9-inch screen that could compete more directly with Apple’s iPad. “We think customers will really enjoy watching new titles like The Avengers, Iron Man 2 and The Hunger Games on their Kindle Fire, PlayStation 3, Xbox, iPad or any of the other of the Amazon Instant Video compatible devices,” says Amazon VP Bill Carr. Epix CEO Mark Greenberg calls the deal “a great line extension” for Amazon. He adds that with the expiration of the exclusivity arrangement with Netflix, part of the distribution deal they cut two years ago, Epix is talking with other potential distributors.

Here’s the release:

SEATTLE & NEW YORK–(NASDAQ: AMZN) – Over the past 12 months, Amazon has announced agreements with every major Hollywood studio, as well as top cable networks. Today, Amazon and EPIX announce a multi-year licensing agreement in the U.S., which will add thousands of new releases, classic library titles and original programs to Prime Instant Video. Programming from the agreement includes movies from EPIX studio partners, Paramount Pictures, Metro-Goldwyn-Mayer Pictures, and Lionsgate. The agreement between Amazon and EPIX will more than double the number of titles available with Prime Instant Video since Amazon introduced Kindle Fire last September. Prime Instant Video now stands at over 25,000 movies and TV episodes available to watch with instant, unlimited streaming at no additional cost to Prime members. Customers who are not yet Prime members can enjoy a free one month trial right out of the box with Kindle Fire. To start watching Prime Instant Video, visit www.amazon.com/PIV.

This agreement between Amazon and EPIX will add new releases such as The Avengers, Iron Man 2, The Hunger Games, Transformers Dark of the Moon, Thor and Rango as well as popular favorites such as Kick Ass, Paranormal Activity 2, True Grit, The Lincoln Lawyer, and Justin Bieber Never Say Never. EPIX also brings original programming including comedy specials and concerts such as Kevin Smith: Burn in Hell and Usher: Live from London.

“We are investing hundreds of millions of dollars to expand the Prime Instant Video library for our customers. We have now more than doubled this selection of movies and TV episodes to over 25,000 titles in just under a year,” said Bill Carr, Vice President of Video and Music at Amazon. “We are thrilled to be able to offer our customers such popular EPIX titles, many of which were just recently in theaters. We can tell from the data that our customers love watching movies on Prime Instant Video. We think customers will really enjoy watching new titles like The Avengers, Iron Man 2 and The Hunger Games on their Kindle Fire, PlayStation 3, Xbox, iPad or any of the other of the Amazon Instant Video compatible devices.”

“We are excited to be working with Amazon and to bring our compelling content to Amazon Prime and Kindle Fire customers,” said Mark Greenberg, President and CEO of EPIX. “This partnership is yet another great example of EPIX’s ability to broaden our reach through a digital platform, underscoring the incredible value of the EPIX content offering.”

Prime Instant Video offers Prime members access to more than 25,000 movies and TV episodes to instantly stream and enjoy at no additional cost on Kindle Fire or any of the hundreds of compatible devices, including Roku, Xbox 360, PlayStation 3 gaming console and the newest addition, iPad. Prime Instant Video is a subset of the more than 120,000 movies and TV episodes available on Amazon Instant Video, which includes new release movies and day after TV shows, for customers to rent or purchase.