Amazon.com Inc.
(
AMZN
) announced a content licensing agreement with A+E Networks,
extending the archive of television shows and films currently
available on its streaming video site, Amazon Prime Instant
Video.
Amazon Instant Video is a digital video streaming and download
service that lets users rent, buy or subscribe to a range of
video content.
The deal with A+E Networks will expand Amazon's already-large
selection of movies and television shows available to customers
as part of their Prime membership. Amazon said that popular shows
from A&E, bio, HISTORY and Lifetime channels will now be
available on Prime.
The deal will add TV episodes from some of the highest rated
television reality shows like Pawn Stars, Storage Wars and Dance
Moms to Amazon's video streaming library, making it a significant
force in the video streaming segment and increasing competition
for
Netflix Inc.
(
NFLX
) and
Apple Inc.
(
AAPL
).
Last September, the online video rental company Netflix had
lost the rights to many of these shows due to the expiration of
its term,with only a few older Biography that remain available on
Netflix. Though this deal is a big blow to Netflix, threatening
its leadership in a growing market, its Internet video library is
estimated to have more than 60,000 titles, still far more than
Amazon's service.
The online retailer has been consistently upgrading and
promoting movies and television shows on its streaming video
service. Over the past 12 months, Amazon has entered into a
number of deals with every major Hollywood studio, as well as
some of the major cable networks. Prime Instant Video now
features more than 33,000 movies and TV episodes for Amazon Prime
members to stream on Kindle Fire HD, iPad, iPhone, iPod touch,
Roku, Xbox 360, PlayStation 3 and Wii U.
We believe that one of the key strategies for Prime Instant
Video remains the expansion of its video archive. Netflix has
seen the benefits of such an expansion in recent times, in spite
of it instituting rate increases.
Amazon is one of the leading players in an extremely
fast-growing market. In the third quarter, Amazon's revenue of
$13.81 billion was better than guidance and inline with consensus
expectations. Management attributed the increase in revenue to
the growing consumption of digital content across different
categories owing to the advantageous value proposition Amazon was
able to provide to its customers.
Currently Amazon retains a Zacks #3 Rank (Hold).
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