Feb 7 Amazon.com Inc is about to
announce a Web video deal with Viacom Inc in what
sources said was one of the last steps in a plan to launch a
standalone subscription service to compete with Netflix Inc
The online retailer will unveil the deal as soon as this
week, according to two people familiar with the discussons.
Viacom, which owns TV shows and movies from MTV Networks,
Nickelodeon and Paramount Studios, would be the latest of
several partners Amazon has made deals with for its Prime
Instant Video service. So far, major studios such as CBS Corp
, Time Warner Inc's Warner Bros, News Corp's
Fox, Sony Corp, Comcast Corp's NBC
Universal and Walt Disney Co have licensed programming
to the retailer.
Viacom Chief Executive Philippe Dauman told Wall Street
analysts last week the company would be announcing a new online
video deal this week, but did not name the partner. A Viacom
spokesman declined to comment further.
To date, Amazon's Prime Instant Video has primarily been an
add-on feature for Amazon Prime members, who pay $79 a year for
free shipping in the United States for most of what they buy.
But Amazon is keen to open up its licensed library of TV
programs and movies as a standalone service for non-Prime
members, and to use it to boost its Kindle Fire tablet,
according to people who have spoken with Amazon executives. An
Amazon spokeswoman did not respond to telephone calls seeking a
Analysts estimate that Amazon sold about 5 million Kindle
Fire tablets in the fourth quarter and the company may sell more
than double that in 2012.
An essential part of Amazon's strategy is to have lots of
content, including video, music and apps, for its tablet users.
The Android-based Fire comes with one free month of the Prime
service, but it is not clear how many owners paid beyond the
Amazon is negotiating with Hollywood studios to expand its
existing rights beyond Prime, as well as bulking up its library,
according to several sources.
In addition to Prime Instant, it also has an Amazon Instant
Video download and rental service similar Apple Inc's
iTunes digital media store.
The retailer said last month the number of videos purchased
or rented from Amazon Instant Video, as well as the number of
customers, more than doubled in the fourth quarter from the year
before. It also said the number of Prime Instant Video streams
rose nearly 300 percent during the quarter.
The Web video market, currently dominated by Netflix, is set
to become increasingly competitive over the next year as major
players such as Amazon, Google Inc and Verizon
Communications Inc launch so-called over-the-top
This week, Verizon said it formed a joint venture with
Coinstar Inc's Redbox video kiosk rental service that
will offer video streaming and DVD rentals by the second half of
the year [ID: nL4E8D672O].