Is This Amazon's Best Shot at Netflix?

Amazon's deal with HBO goes live today, but Netflix doesn't have to lose.

May 21, 2014 at 11:15AM

Today's a big day for'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.

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Rick Munarriz owns shares of Netflix. The Motley Fool recommends and owns shares of and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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