Amazon.com?Inc. has officially ratcheted up its rivalry with?Netflix?Inc. and Hulu LLC.
The Seattle-based online retailer said Wednesday it reached its first content-licensing deal with a major TV network, signing an agreement with?CBS?Corp. that bolsters the online retailer’s streaming-video service. The move lets customers of Amazon Prime, the company’s premium-shipping program, watch 2,000 episodes of 18 CBS shows, including “Medium” and “Numb3rs.”
The deal involves many titles CBS already licenses on a non-exclusive basis to streaming juggernaut?Netflix?– popular programs like “The Tudors” and “Cheers.”
Industry analysts said yesterday they expect the Amazon-CBS content tie-in to be the first of many.
“We’re following what our customers are doing in the marketplace,” said Cameron Janes, Amazon’s head of digital-video efforts. “We’re watching customers want to consume more and more of our products digitally.”
The agreement is nonexclusive, with CBS having struck a similar licensing deal with Netflix earlier this year. In a statement, CBS Chief Executive?Leslie Moonves?said the agreement “represents another meaningful way for us to realize incremental value for CBS’s content.”
The Amazon-CBS deal puts Amazon in direct competition with Netflix, which started as a DVD rental-by-mail service but has shifted emphasis in recent years to a streaming video service in a bet that consumers will increasingly consume their entertainment digitally. Netflix last week raised the pricing around some of its offerings. Hulu, meanwhile, also offers streaming video through a subscription model.
?This agreement could diminish the likelihood of Amazon being a buyer of Hulu since it?s going down its own path and doing separate deals with content vendors,? said James Cordwell, an equity analyst at Atlantic Equities inLondonwho recommends Amazon shares. Amazon spokeswoman Mary Osako didn?t return a call seeking comment.
Amazon, based in?Seattle, fell $2.51 to $215.55 at 4 p.m.New Yorktime in Nasdaq Stock Market trading. The shares have gained 20 percent this year. CBS climbed 78 cents to $28.74 on the New York Stock Exchange and has increased 51 percent this year.
Netflix, based in Los Gatos,California, declined $5.89 to $281.40 on the Nasdaq and has risen 60 percent this year. CBS and Netflix announced a two-year, non-exclusive licensing agreement for streaming content in February.
The deal strengthens Amazon’s hand in digital video, especially since the service is free of charge for those who pay $79 a year for its shipping service, Amazon Prime. Bezos is also part of the chase to acquire Hulu, the premium online content venture, owned by News Corp. (which owns The Post), Disney,?Comcast?and Providence Equity.
Sources: WSJ, Bloomberg, nypost