With Fox deal, Amazon enters the deep end of streaming content pool

Amazon (Nasdaq: AMZN), which has been sticking its toe into the streaming video pool since launching its Amazon Prime Instant Video offering in February, dove in head first this week. The e-tail giant reached a deal that will give it access to thousands of movies and TV shows from News Corp.'s (Nasdaq: NWSA) Fox unit, including films like The Last of the Mohicans, Mrs. Doubfire and Speed, as well as TV shows like Arrested Development and 24.

This deal bumps the service's title count by about 22 percent, but Amazon has steadily built its library--it launched with just 5,000 titles--to more than 11,000.

In July, Prime added some 2,000 titles from CBS, including 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. It also added some 2,000 movies and 7,000 TV episodes from NBCUniversal to its streaming service weeks later.

An Amazon spokesperson said the company is "very much committed to growing this title count."

With the deeper content, Amazon, which declined to discuss the financial terms, has become an even more potent threat to Netflix (Nasdaq: NFLX) and other operators prowling the waters of the market.

Amazon sees 60 million visitors to its website each month, millions of whom are Amazon Prime members, ready to buy something with credit card numbers already on file.

And, as Prime continues to grow its title count, the economics become even more appealing.

The video service is, after all, a value-added play that's part of the Amazon Prime shipping service that costs $79 a year, or just $6.58 a month, almost 20 percent cheaper than Netflix's $7.99 monthly cost.

Back in February, when APIV launched, Caris & Co. analyst Sandeep Aggarwal said he saw the Amazon play as a precursor to the company's more aggressive development of its streaming and VOD play.

"In our view, this seems to be both an offensive and defensive move," he said. "On one hand, it brings Amazon into the fast-growing movie streaming business with a value-priced offering; on the other hand, Amazon strengthens the value proposition for its Prime program. We expect a broader roll-out of this offering in the coming quarters."

For more:
- see this Wall Street Journal article

Related articles:
Netflix adds CBS content as Hulu, Amazon burn... but watch out for Amazon
Amazon gets access to Universal Pictures library, puts heat on Netflix, Hulu
Amazon Prime gets CBS shows to stream, adds a little dash to its offering

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