Amazon Prime gets CBS shows to stream, adds a little dash to its offering

Jim O'Neil

editor's corner
While Microsoft (NASDAQ:MSFT) apparently has joined Netflix (NASDAQ:NFLX) in pulling out of negotiations for Hulu, and Yahoo (NASDAQ: YHOO) appears to be setting the foundation for a deal to buy the company, assuming it can get more than the two-year content exclusivity being offered by the media triumvirate that owns it, Amazon (NASDAQ: AMZN) may be the next name to drop from the list of potential buyers.

The e-tailer just inflated its Amazon Prime streaming library by about 2,000 titles, making a deal with CBS for full seasons of 18 TV series including, The Tudors, Numb3rs, Medium, Frasier, Cheers, the original Hawaii Five-0, The Twilight Zone, Twin Peaks and the Star Trek stable. There are, of course, no in-season episodes available.

The deal, like the one Netflix signed earlier this year with the network, isn't exclusive, and few details were released. It's safe to assume, though, that it's likely similar to the Netflix deal, probably worth about $200 million.

The shows, which will be available later this summer, do give Amazon Prime a little more panache with users who have--for the most part--been somewhat underwhelmed with the offering to date.

And, even with just 8,000 streaming titles (it also has some 90,000 on-demand movie and TV show titles available in its Amazon Instant Video service) compared to Netflix's 20,000, Amazon Prime is likely to gnaw away a few disgruntled Netflixers.

CBS President and CEO Leslie Moonves, who has said that the broadcaster would make (online video) deals when it made sense, praised Amazon's positioning.

"Amazon has created one of the most popular consumer marketplaces in the world, and we are very pleased to make these titles available to their Instant Video and Prime customers," he said. "This new agreement represents another meaningful way for us to realize incremental value for CBS' content."

Amazon Prime, a $79-per-year service that gives users unlimited two-day shipping, expanded in February to give users access to streaming video. Pundits immediately assailed it as a pale offering next to Netflix and Hulu.

But, while Hulu eventually hopes to have 1 million paying customers on its Hulu Plus premium service, and Netflix recently stunned its 23 million subscribers with a 60 percent price hike for a combo streaming and DVD-by-mail offering, Amazon is giving its streaming service away for free, an add on to the shipping deal it already offers. That, said some analysts, could be quite an inducement for customers to try it out.

Regardless, the deal shows that broadcasters, even cautious ones like CBS, increasingly are plumbing the waters of online video.--Jim