Taps Into Viacom’s Children’s Programming In Licensing Deal

Michael Teague  |

Just days after the expiration of the licensing deal between Netflix (NFLX) and Viacom (VIA) that gave the streaming video service’s 36 million customers access to programming from channels such as Nickelodeon and Comedy Central, Amazon (AMZN) has notched a victory in the battle over the streaming market by penning its own deal with the cable television company.

Amazon’s Prime Instant Video service, one of the many operations in which the company has been investing considerable time and effort, is available to customers for a yearly fee of $79 that includes free shipping for a great number of items sold through the website, a substantial undercutting of Netflix’s $7.99 per month.

While the details are not yet entirely clear, the red meat of the deal for Amazon seems to be the access it will have to children’s shows from Viacom’s Nickelodeon and especially Nick Jr. channels. Confirmation of this can be seen in the fact that Amazon will make shows from both channels, such as the addictively popular Dora the Explorer and Spongebob Squarepants, available through its Kindle FreeTime Unlimited service. There is no doubt that Amazon’s current customers who have children will rejoice at this news, and it is a reasonable assumption that the move could translate into significant sales growth for both the Prime service as well as the Kindle device.

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But Amazon’s new turf is by no means limited to children’s programming. In Tuesday’s announcement, both companies highlighted the fact that Amazon Prime will offer viewers hundreds of new shows, some of which cannot be found on any other service currently available.

Still, Bill Carr, Amazon’s vice president for Digital Video and Music noted that children’s programming is one of the most watched categories of television programming available through Prime’s instant video service.

The deal is the most significant recent development in the ongoing battle between Amazon, Netflix, and Hulu to secure as much of the streaming market as possible. While Netflix is still the inarguable leader in terms of subscribers, all three services have invested in original programming. While Netflix scored big earlier this year with the unexpected and critically acclaimed political drama “House of Cards,” it much-anticipated release of a 5th season of the star-studded cult classic Arrested Development crashed into some pretty disappointing reviews.

This summer, Amazon and Hulu’s Plus service will be premiering several new original shows, with both companies having secured enough star-power to make it work.

While significant, the announcement did not make huge ripples for the new partners on Wall Street by midday trading, with shares for Amazon up nearly one percent to $268.29, Viacom’s B-class shares down 1.5 percent to $66. Netflix, on the other hand, was down more than 2 percent to $220.45.

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