Is This Amazon's Best Shot at Netflix?

Today's a big day for Amazon.com's (NASDAQ: AMZN  ) Prime Instant video service. The deal it struck with Time Warner's (NYSE: TWX  ) HBO to offer some of the premium movie channel's content went live today. Members of Amazon's Prime loyalty shopper club can stream the entire runs of classic shows including The Wire, Six Feet Under, and The Sopranos. Older episodes of some current shows, including Boardwalk Empire and True Blood, are also in the catalog, but we're not talking about recent episodes. The content available from HBO shows that are still on the air is at least three years old. 

It's still a great catch for Amazon. Streaming has proven to be a great platform for quality serialized dramas, and that's exactly what Amazon is getting here. Sure, there are also some documentaries and stand-up specials in the mix, but this is also a way for folks to get back in touch with cult faves along the lines of Carnivale and Oz that may not be as marketable for HBO but are still capable of appealing to a new audience.

If you're wondering why Netflix (NASDAQ: NFLX  ) didn't make a play for this valuable content, it's not as if it had a choice.

"We didn't bid on it," CFO David Wells said at the J.P. Morgan Technology, Media and Telecom Conference yesterday. "To my knowledge, they didn't shop it."

"It's good older content with some conspicuous absences in the title list," he continued, hoping to strip the deal of some of its relevance. "It solves a problem for HBO. They probably were not getting a lot of HBO traffic on those catalog titles, and they need to reach that core never market."

Wells is biased, of course. Arguing that this isn't HBO's best content -- and that HBO needed a way to reach folks that will "never" pay for cable -- misses the point. There's now more content on Amazon that viewers can't get on Netflix.

This doesn't have to be bad for Netflix. HBO went directly to Amazon -- Netflix's closest, yet distant, direct competitor -- to offer it valuable content. Is that more likely to result in cancellations for Netflix than it is in people subscribing to both Amazon Prime Instant and Netflix and cutting the cord with their cable providers? A year of Netflix combined with Amazon Prime costs roughly as much as a year of HBO, and that's before the costly requirement of a cable plan. 

Don't let Netflix diminish the significance of this content deal -- but don't assume that Netflix will suffer as a result of a more valuable Amazon streaming platform.

Your cable company is scared, but you can get rich
You know cable's going away. But do you know how to profit? There's $2.2 trillion out there to be had. Currently, cable grabs a big piece of it. That won't last. And when cable falters, three companies are poised to benefit. Click here for their names. Hint: They're not Netflix, Google, and Apple.


Read/Post Comments (1) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 21, 2014, at 4:48 PM, AceInMySleeve wrote:

    It's a good one. Lots of great content added. I'd be surprised if this doesn't help them considerably.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2966599, ~/Articles/ArticleHandler.aspx, 10/20/2014 6:58:08 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement