Netflix (NFLX 4.17%) has been one of the hottest stocks in recent weeks, but that doesn't mean it isn't vulnerable. Amazon.com (AMZN 1.30%) announced a deal with Time Warner (TWX) this morning that will bring the entire seven seasons of The Closer and past and future installments of Falling Skies to its Prime Instant Video library.

That's a notable catch, and not just because the number of episodes across both shows pushes Amazon's available title count beyond 30,000. And the deal with Time Warner's TNT and Warner Bros. Domestic TV is important because neither show is currently available on Netflix.

Most of Amazon's grabs in the past have been in areas of content where Netflix has planted the flag first. From the juicy EPIX deal to many of its most popular movies and television shows, Netflix has "been there, done that" written all over itself.

However, this is another piece of Time Warner content that Prime Instant Video has -- and Netflix does not. Yet any overlap ultimately helps Netflix. Sure, Amazon is cheaper -- and includes more perks with its Prime membership -- but Netflix is the one that's seamlessly integrated across countless home-theater appliances. When's the last time you saw an "Amazon" button on a Blu-ray remote control player the way many players have "Netflix" options?

Differentiated content is actually in the best interest of both companies. Just as cable customers often find themselves having to subscribe to Showtime as well as Time Warner's own HBO to follow certain channel-specific shows, programming diversity will have more people subscribing to both Netflix and Amazon Prime.

The skies aren't falling at Netflix. The stock has risen nearly 80% since bottoming out this summer. It traded lower this morning -- perhaps reacting to Amazon's news -- but then moved higher in the afternoon. The market gets it. Netflix may not be the darling it was when it peaked two summers ago, but perceptions have evolved beyond fretting what content a lower-priced rival is grabbing. The picture is far larger than that.

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