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Why Did Amazon Ink a Deal to Stream PBS Kids’ Programming?

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The deal is likely to bolster Amazon’s offerings for children

Amazon (AMZN) entered into a multiyear agreement with PBS (Public Broadcasting Service) to stream many of its kids’ programs. These shows include Daniel Tiger’s Neighborhood, Martha Speaks, and Wild Kratts, which Amazon Prime Video members can stream. Moreover, the subscribers will be able to download these programs to watch offline.

Financial terms of the deal were not disclosed, however, the recent announcement means that Netflix (NFLX) and Hulu will lose the rights to stream many of PBS’s shows. As children’s programming is gaining traction, competition among the players operating in this space has heated up to strengthen their offerings. This exclusive deal with PBS is likely to bolster Amazon’s market share in children’s programming.

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Amazon’s focus on content to popularize its Prime Video service has paid off well in the past. The company has managed to increase the viewing hours of its Prime Video service. The chart above illustrates why Amazon’s progress in the video-streaming service means trouble for some other services in this space.

According to a Digitalsmiths 4Q15 video trend report, Amazon Prime has an ~20% market share in the OTT (over-the-top) market. Netflix leads the OTT market with a share of 48%. Hulu, Time Warner’s (TWX) HBO Now, and CBS All Access are smaller players in this market.

Amazon introduced new pricing

Recently, Amazon announced a new pricing structure for its Prime Video subscription. Amazon is now offering its video streaming service separately from its Prime free-shipping program.

Subscribers can now separately purchase Prime Video for $8.99 per month, $1 cheaper than Netflix’s basic plan. Meanwhile, Amazon is investing in more original shows while entering new markets such as Japan (EWJ).

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