Netflix, CBS ink streaming TV licensing pact

Netflix and CBS have entered a two-year licensing pact for streaming TV shows. The news comes as Amazon stepped up an assault on Netflix.

Netflix and CBS on Tuesday said they have entered a two-year licensing pact for streaming TV shows.

The timing of the news is notable given that Amazon included streaming video into its Amazon Prime free-shipping service.

The terms of the Netflix and CBS deal go like this:

  • A two-year non-exclusive licensing pact for select TV shows from the CBS library;
  • These titles include full seasons of Cheers and Frasier. Sci-fi shows like Star Trek and Twin Peaks are also included.
  • The deal can be extended for another two years.
  • Terms of the partnership weren't detailed but the CBS shows will be available in early April.

In many respects, the CBS deal looked like a way for the media company to monetize its library while bolstering Netflix's library. CBS is the parent company of CBS Interactive and ZDNet.

Analysts said that Amazon's video offering isn't likely to ding Netflix's streaming service. Piper Jaffray analyst Michael Olson said in a research note:

Amazon is the latest in what will likely be a number of competitors in the subscription online video space. Currently Netflix, Amazon & Hulu are the only offerings, but others, including Coinstar (Redbox), are looking to enter the market. That said, the longer Netflix goes without a serious competitor, the more difficult it will become to mount a challenge. We believe the most significant threat from new competition in the space is the potential for rising content costs with multiple new bidders looking to improve content libraries.