Tuesday, September 4, 2012

Kindle News: Amazon makes deal with Epix, adding thousands to Prime Instant Video

Amazon has made a multiyear-licensing agreement with EPIX, adding thousands of movies to its Prime Instant Video service

As many know, Amazon Prime is a program that allows unlimited viewing of "Prime"-labeled video,  included in the yearly cost for free 2-day shipping on Amazon's directly-sold products

  In essence, Netflix lost exclusive rights to stream such movies as "The Avengers," "The Hunger Games" and "Mission: Impossible" now that Amazon has those rights also.

  The Los Angeles Times article by Dawn C. Chmielewski reports that Netflix's stock dropped 7% in midday trading on this news (east coast) and it dropped as much as 11% a couple of hours later.

  This deal added movies from Paramount Pictures, Lionsgate and Metro-Goldwyn-Mayer to Amazon's Prime.

Other sources point out, though, that EPIX's movies are a small portion of Netflix's videobase.  They "account for just a fraction (mid-single-digits) of the viewing in Netflix households, wrote Vasily Karasyov of Susquehanna Financial Group."   Reuters' Alistair Barr adds that Netflix spokesman Joris Evers said that Epix accounts for about 5 percent of Netflix's viewing hours.

  The Netflix stock may be weaker now, Janney Capital Markets analyst Tony Wible says, because it's less likely that Amazon will acquire Netflix.  Found that an interesting take.

  Amazon VP of music and music Bill Carr said that the company is ""investing hundreds of millions of dollars to expand the Prime Instant Video library" -- a larger number than I'd expect.

While Prime is $79/year ($6.58/mo. equivalent) for the free 2-day shipping of Amazon products (no minimum purchase), it also allows members to borrow a Kindle book (offered for lending by publishers and authors) once per calendar month) in addition to streaming from a collection of something like 25,000 movies and tv shows at no additional cost.

Bloomberg's Edmund Lee and Sarah Frier add that the agreement with Epix lasts three years but they say the source, "familiar with the transaction" asked not to be identified as "the terms aren't public."  Odd bit of info to release and then request no sourcing info.  "Cat Griffin, an Amazon spokeswoman, declined to comment.

Not earthshaking news, but it adds more to what many perceive as Amazon's strength - its ecosystem.  A wealth of free streaming video for Prime shipping members and its 145,000 titles in its Kindle Owners' Lending Library

The main Amazon page now includes the announcement of the additional 2,000 movies coming to Prime Instant this year, citing especially "Thor, Iron Man 2, and Captain America: The First Avenger, plus recent hits such as Transformers: Dark of the Moon, Warrior, Super 8, True Grit, and Rango."

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