Amazon content deal with Viacom readies it to go toe-to-toe with Netflix

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Amazon (Nasdaq: AMZN), which had been rumored to be moving toward launching a standalone subscription service to compete with Netflix, pulled the trigger this morning on a deal with Viacom that takes it one step closer.

The deal, on the heels of an announcement by Verizon (NYSE: VZ) that it would partner with Redbox to launch a Netflix (Nasdaq: NFLX)  rival, gives Amazon a bucket of new content from Viacom properties including MTV Networks, Nickelodeon and Paramount Studios, and takes its content library to some 15,000 titles.

Among the highlights of the deal coming to members over the next several months are Comedy Central's Chappelle’s Show and The Sarah Silverman Program; MTV's Jersey Shore, The Hard Times of RJ Berger, and The Hills; Nickelodeon's iCarly, Dora the Explorer, SpongeBob SquarePants, and Yo Gabba Gabba; Spike's Deadliest Warrior: The Show and the Aftermath; TV Land's Hot in Cleveland; and, VH1's Love & Hip Hop and Mob Wives.

"Over the last year we have received fantastic customer feedback about Prime Instant Video. We are constantly working to improve the service by adding the shows that our customers enjoy the most," said Brad Beale, director of video content acquisition for Amazon. "This deal with Viacom brings Prime customers and Kindle Fire users thousands of comedies, kids' shows, reality TV and much more from some of the best cable networks available. We now offer more than 15,000 movies and TV shows in Prime Instant Videos and are working hard to add even more great content."

Amazon signed a content deal with Fox in September and already has content deals in place with CBS, Warner Bros., Sony, NBCUniversal and Disney.

Amazon's Prime Instant Video currently comes as a free add on to the company's $79-a-year Amazon Prime shipping deal. It pays content owners fees based on its number of subscribers, which currently clocks in at 7 to 8 million.

Since its February 2011 launch, the company has been growing in the rearview mirror of Netflix CEO Reed Hastings who, in the company's letter to shareholders last month, wrote "We expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours," and added, "Both Amazon and Hulu Plus's content is a fraction of our content, and we believe their respective total viewing hours are each less than 10 percent of ours."

Amazon has been pushing studios to broaden its streaming rights, Reuters reports, and has been steadily growing its library. In addition to Prime Instant Video, it also offers customers a large selection of video on demand titles to rent and buy at Amazon.com. It said its rent/buy business doubled in the fourth quarter compared to a year ago.

For more:
- see this release
- see this Reuters article

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