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Amazon, CBS Ink Streaming Deal

20 Jul, 2011 By: Erik Gruenwedel

Catalog of network TV shows marks Amazon Prime’s first significant content agreement

CBS Corp. and Amazon July 20 announced they have entered into a multiyear agreement that allows Amazon Prime loyalty members to stream upwards of 2,000 episodes from the network’s TV library.

The deal includes full seasons 18 popular television series, including "The Tudors," "Numb3rs," "Medium," the complete "Star Trek" franchise, "Frasier" and "Cheers." Starting this summer, dozens of CBS shows also will be available on transactional video-on-demand to Amazon Instant Video customers.

Seattle-based Amazon launched Prime Video streaming earlier this year with 5,000 catalog movies and TV programs as a free add-on to its $79 annual loyalty membership program that includes free two-day shipping on most purchases and one-day delivery on small-ticket items.

To date, Amazon Prime represents the single-biggest direct threat to Netflix’s market-leading subscription-based video-on-demand, or SVOD, streaming service.

“Our new deal with CBS makes Amazon Prime [now with 8,000 programs] even better for customers,” said Amazon CEO Jeff Bezos in a statement.

The fact that Amazon convinced CBS CEO Leslie Moonves to license content underscores the growing influence digital distribution — spearheaded by Netflix — has altering the home entertainment landscape. Moonves has made no secret that he considers SVOD a double-edged incremental revenue source that could also negatively affect its traditional revenue sources such as TV syndication and pay-TV if not monitored closely.

“This new agreement represents another meaningful way for us to realize incremental value for CBS’s content,” Moonves said.

Amazon Instant Video is a streaming video service that offers customers more than 90,000 movies and television shows available to purchase or rent, and with this CBS content included, will offer more than 6,000 movies and television shows included at no additional cost with an Amazon Prime membership. Customers can instantly watch movies and television shows from Amazon on a Mac, PC or directly on television with any of the 300 compatible devices.

Amazon’s content upgrade to its Prime streaming service comes as it is engaged in a high-profile political battle with lawmakers in California over the state’s new sales tax law that requires Internet companies that do business in the state to collect sales tax on transactions similar to what brick-and-mortar businesses are required to do.

Amazon earlier this month said it would seek a ballot measure allowing voters in 2012 to overturn the new law. The online retailer already has cut ties to more than 10,000 affiliates in California who collect fees for steering business to Amazon through online links.


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