Amazon inks NBCUniversal deal; Aims to match Netflix's content library

Summary:In Netflix's recent letter to shareholders, the company took an a direct shot at Amazon's move to bundle streaming into Prime shipping subscriptions. Given recent deals, it appears that Netflix's comments must be hanging on an Amazon bulletin board somewhere.

In Netflix's recent letter to shareholders, the company took an a direct shot at Amazon's move to bundle streaming into Prime shipping subscriptions. Given recent deals, it appears that Netflix's comments must be hanging on an Amazon bulletin board somewhere.

Netflix said:

Amazon recently added thousands of films and TV shows, and includes them as a free service to subscribers of its Prime shipping service. We have vastly more streaming content, are available on more streaming devices and are purely focused on subscription video streaming. So far, we haven’t detected an impact on our business from Amazon Prime.

As for Amazon's response, CFO Tom Szultak said on the company's second quarter earnings conference call:

In terms of digital content, we certainly have an offering right now with the opportunity with Prime, we certainly have a product of Prime and video that we like. It’s extremely early but we’re learning customers love it and what they’re seeing so far. We like what we’re seeing so far in terms of some of the metrics but again it’s very very early.

If you combine the two statements, Amazon is a flea to Netflix for now, but the e-commerce company plans to become a player. Amazon's actions speak louder than metric free statements.

Today, Amazon announced a video deal with NBCUniversal to bolster the Prime TV library. On July 20, Amazon announced a similar deal with CBS, parent of ZDNet.

For its part, Netflix inked an international licensing agreement with CBS and AMC on Wednesday. On July 13, Netflix inked a deal with NBC Universal.

The bottom line here is that content costs will be going up for streaming media players. And the No. 1 reason Netflix costs may go up will be Amazon. If there's a race for content libraries, Amazon and Netflix will continue to one-up each other. Those moves will only increase the value of content libraries.

Next up for Amazon will be to secure distribution deals. For instance, Netflix has the Wii staked out, but Amazon doesn't. If Amazon can reach everywhere Netflix does chances are good that there will be a revision or two in future shareholder letters.

Related:

Netflix betting on subscriber fallout in Q3, everyone over it in Q4

Topics: Amazon, Banking, Browser, Hardware, Mobility, Software Development

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

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