CBS Throws In With Amazon Amid Hulu Sale Speculation
July 20, 2011
NEW YORK and SEATTLE: CBS announced this
morning it would be putting some of its TV library titles on Amazon.com. The deal comes amid changes in the over-the-top video
landscape, with a speculated Hulu.com
sale and a price structure change at Netflix.
Amazon and CBS entered a non-exclusive licensing agreement for the network's library content. Financial terms
were not disclosed. Amazon initially will add 2,000 episodes, eventually
posting more than 8,000 movies and TV shows comprising the full seasons of 18
series: “The Tudors,” “Numb3rs,” “Medium,” the complete “Star Trek” franchise, “Frasier,”
“Cheers,” and others. The content will be available to Amazon Prime subscribers
at no additional charge. The current annual fee for the service is $79.
Beginning this summer, “dozens of CBS shows will also become available to
Amazon Instant Video customers,” the announcement said. Amazon IV is a
streaming video service with more than 90,000 movies and TV shows available to
purchase or rent. Users can watch content on demand on a Mac, PC or
directly on TV with any of the 300 compatible devices.
Reports continue to emerge that Hulu.com
is on the auction block. Hulu is the over-the-top video site put together by
NBC Universal, Fox and Disney, and where the three post their own network fare.
Providence Equity also invested $100 million in the venture for a 10 percent
stake. The service has a reported 1 million subscribers, and is being offered
with a five-year programming guarantee. Recent reports indicate Microsoft has
elected to not participate in second-round bidding.
Another over-the-top video service, Netflix, recently split its subscription
option from $10 a month for streaming and DVD delivery to a separate $8 fee for
each. CBS also cut a non-exclusive deal with Netflix in February for a smaller portion of its library.
Shares of Amazon (NASDAQ: AMZN) jumped briefly to $220.20 before settling back
down to around $218, where they rose yesterday after trading Monday as low as
$208. Wells Fargo analysts estimated the CBS deal would yield $100 million for Amazon and 6 cents incremental earnings per share for 2012. The company started trading in Brazil on Tuesday. Shares of CBS (NYSE: CBS) rose around 2 percent to $28.56. Netflix (NASDAQ: NFLX) dropped nearly 3
percent to $279.00.
~ Deborah D. McAdams