Amazon Scoops Up Viacom Contract in Streaming Deal That Could Hurt Netflix

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Riding high on nearly 30 million domestic subscribers and over 4 billion hours of streamed video, Netflix continues to be the streaming darling. Though, that reputation may come into question with one important demographic now that Netflix no longer has the rights to stream content from Viacom, which holds the rights to popular children’s shows like Blue’s Clues and Dora The Explorer. However, Amazon Prime, Netflix’s main competitor, wasted no time scooping up the Viacom licensing deal in a reported $200 million, two-year contract, Reuters reports

Amazon won’t divulge how many customers subscribe to its $79 annual Prime membership, but it did say that children’s shows are “one of the most watched TV genres” on their service, CNN reports. The company couldn’t be prouder of its new deal, devoting a major chunk of its homepage to a note to its customers, particularly highlighting the major increase in kid shows on the service. The deal is quite the dig at Netflix, whose CEO Reed Hastings told CNBC last week, “If you’re a parent and your child’s looking for Blue’s Clues, you know, that is definitely a problem,” while also noting that his company still offers plenty of kids’ programming.[more]

The New York Times notes that even though Amazon’s streaming audience is smaller than Netflix’s, the deal with Viacom “presents the opportunity to have tie-ins with the consumer products that Amazon sells, like DVDs, ‘Dora’ backpacks and ‘SpongeBob SquarePants’ beach towels.”

The streaming-video marketplace has become even more competitive as services like Prime, Hulu and Roku, among others, attempt to bulk up their offerings. While claiming one-third of all in-home streaming since 2010, Netflix has been losing content and not renewing contracts. In 2011, it couldn’t negotiate a new deal with Starz and last month, contracts with MGM, Comcast’s Universal and Warner Bros. all expired. However, it did strike a deal with Disney for some of its content last month. The service seems to be concentrating more heavily on producing its own content, after seeing success from House of Cards, as well as the launch of Hemlock Grove and cult-favorite Arrested Development. But that arena isn’t empty either, as Amazon announced it was starting production on five new original series. 

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