) announced a three-year agreement with Paramount Pictures,
extending its archive of films in its streaming video site, Amazon
Prime Instant Video.
The online retailer has been consistently upgrading and
promoting movies and television shows on their streaming video
service. In June last year, Amazon signed a deal with
) for broadcasting some of their classics. This was followed by Fox
in September, and by
) a few months later. In February this year, Amazon signed a deal
), taking the number of videos to a total of 15,000.
The latest deal with Paramount Studios will expand Amazon's
already-large selection of movies and TV episodes available to
customers as part of their Prime membership. The Prime membership
subscription comes at a cost of $79 per year.
The users can now view more than 17,000 movies and TV episodes
on computers and digitally connected devices. However, Amazon has
yet to match
), its competitor in this space whose online viewing library
comprises 60,000 titles.
We believe that one of the key strategies for Prime Instant
Video should be the expansion of its video archive. Netflix has
seen the benefits of this action in recent times, in spite of its
instituting rate increases. However, Amazon's vast offerings at
discounted rates ($79 per year 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 is one of the leading players in an extremely
fast-growing market. In the first quarter 2012 earnings
announcement made on April 25, Amazon's North America Media
business declined by 14.2% sequentially; which was
lower-than-expected, thus indicating that the Media segment remains
one of the strongest contributors to growth.
Management attributed the increase in revenue to the growing
consumption of digital content across different categories because
of the advantageous value proposition Amazon was able to provide to
However, competition from
) through its iBooks app,
Barnes & Noble, Inc.
) and Google remains strong.
Currently, Amazon has a Zacks #3 Rank, which implies a Hold
rating in the near term.
APPLE INC (AAPL): Free Stock Analysis Report
AMAZON.COM INC (AMZN): Free Stock Analysis
BARNES & NOBLE (BKS): Free Stock Analysis
CBS CORP (CBS): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
EBAY INC (EBAY): Free Stock Analysis Report
NETFLIX INC (NFLX): Free Stock Analysis Report
VIACOM INC-B (VIAB): Free Stock Analysis Report
To read this article on Zacks.com click here.