Amazon.com Inc.
(
AMZN
) announced content licensing agreements with Turner Broadcasting
System, Inc. & Warner Bros. Domestic Television Distribution,
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 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. In September this year, Amazon
signed a deal with EPIX, taking the number of videos to a total
of 25,000.
The latest deal with Turner & Warner will expand Amazon's
already-large selection of movies and television shows available
to customers as part of their Prime membership. Amazon said that
the epic TNT drama series Falling Skies and The Closer will now
be available on Prime. Prime subscribers can now access all seven
seasons of The Closer as well as the current and future seasons
of Falling Skies on Prime Instant Video at no additional
cost.
The deal will add two leading TV series 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
). Prime Instant Video now features more than 30,000 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. Netflix's Internet video
library is estimated to have more than 60,000 titles, far more
than Amazon's service.
However, Amazon's vast offerings at discounted rates ($79 per
year for Prime shipping service versus Netflix charges of $95 per
year for its streaming video service) could create a price war in
the digital delivery of movies. Amazon's additional advantage is
a steady customer base since Prime offers several other
advantages (related to online shopping for example) compared to
Netflix.
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 the guidance and in-line 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.
Amazon currently retains a Zacks #3 Rank (Hold). Amazon's
competitors (whether direct or indirect) are
eBay Inc.
(
EBAY
), which retains a Zacks #2 Rank (Buy), and
Barnes & Noble, Inc
. (
BKS
) and
Google
(
GOOG
), both os which carry a Zacks #3 Rank (Hold).
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