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Amazon Prime Instant Video’s New Initiatives against Netflix

Shirley Pelts - Author

Jan. 13 2016, Updated 1:05 a.m. ET

Amazon Streaming Partners Program

Netflix’s (NFLX) competition in the video streaming market is increasing. Amazon (AMZN) has taken several initiatives in the last year to expand its Prime Instant Video service to counter Netflix.

In December 2015, Amazon announced its Streaming Partners Program, an OTT (over-the-top) streaming subscription program. Under this program, Amazon partnered with around 20 media companies, including CBS (CBS), Showtime, Starz, and A+E Network.

The new service will be available exclusively to Amazon Prime members. An Amazon Prime membership costs $99 per year or $8.25 per month. The Streaming Partners Program provides viewers with free trial subscriptions for all of its Streaming Partners.

Some of the content partners in this program, including Showtime and Starz, are also offering special pricing for Prime members. A Showtime and Starz subscription will be available at a special price for Prime members for $8.99 per month in addition to the price of Amazon’s Prime membership.

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With the Streaming Partners Program, Amazon is also taking care of all the infrastructure required for an OTT service such as billing and customer care operations. Amazon is also providing the streaming infrastructure, which means that networks like Starz don’t have to enter into a separate streaming agreement with content delivery networks (or CDNs).

Other initiatives

Amazon is also producing original content and has signed Woody Allen to direct Amazon’s first exclusive television series in 2016. Amazon has also entered into content licensing deals with Viacom (VIAB) and HBO (TWX). Amazon’s Prime Instant Video service is following in Netflix’s footsteps by entering international markets such as Japan (EWJ) and by pursuing original content.

In 2015, Amazon also rolled out a new initiative for its Amazon Prime Instant Video subscribers in the United States, the United Kingdom (EWU), Germany (EWG), and Austria. These subscribers gained the ability to download TV shows and movies to their Apple (AAPL) iOS and Alphabet (GOOG) Android platforms for offline viewing at no additional cost. Amazon is the first streaming subscription service to offer this ability.

Amazon makes up 5.68% of the PowerShares QQQ Trust Series 1 ETF (QQQ). For an investor interested in exposure to the Television & Radio sector, QQQ has an exposure of 4.37% to the sector.


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