- Obama not worried about Ebola at upcoming African summit in D.C.
- Obama: ‘We tortured some folks’ after 9/11
- Obama administration asked whole D.C. Circuit to take on major Obamacare case
- Mark Levin: Topple GOP leadership or country will ‘unravel’
- Massachusetts to let police chief deny gun buys to those deemed unfit
- John Kerry condemns attack on Israeli soldiers, kidnapping
- U.S. starts to evacuate American Ebola patients from West Africa: Report
- Geraldo slammed as ‘dummy’ for backing Clinton’s bin Laden claim
- Israeli spokesman: No need to debate who broke the cease-fire
- 35 Palestinians killed; Israeli officer missing
Amazon gets Epix video rights to challenge Netflix
Question of the Day
SAN FRANCISCO (AP) - Amazon.com’s Internet video library is gaining more box-office appeal under a licensing deal with Epix that threatens to undercut Netflix leadership in a growing market that’s transforming the entertainment industry.
The multiyear agreement announced Tuesday eliminates one of the competitive advantages that Netflix’s video subscription service held over a rival offering that Amazon provides to customers who pay $79 annually for unlimited free shipping of merchandise bought in its Web store.
Netflix Inc. had been paying about $200 million annually during the past two years for the exclusive online rights to show movies from Paramount, MGM and Lionsgate 90 days after they appeared on Epix’s pay-TV channel. The exclusive window closed on Netflix at the end of August, requiring the company to either renegotiate the terms with Epix or allow the rights to be sold to other Internet video services.
After Netflix decided that holding the exclusive rights to Epix was no longer worth the cost, Amazon.com pounced on the opportunity to expand its Internet video service.
The Epix library includes the streaming rights to about 2,000 movies, headlined by such recent hits as “The Hunger Games” and “The Avengers.” The Epix rights cover movies that generated about 15.5 percent of ticket sales at U.S. theaters, according to Janney Capital Markets analyst Tony Wible in a Tuesday research note.
Amazon.com Inc. says its Internet video library for customers of its “Prime” shipping service will now be stocked with more than 25,000 movies and episodes from old TV series. That’s twice the number that Amazon boasted last September when the company introduced its tablet computer, the Kindle Fire, one of the many hand-held devices on the market that streams video over high-speed Internet connections.
Amazon, based in Seattle, is scheduled to show off the next version of the Kindle Fire Thursday.
Although Netflix doesn’t publicly disclose the figure, its Internet video library is estimated to have more than 60,000 titles _ still substantially more than Amazon’s 19-month-old service. Like Amazon, Netflix counts each episode of a TV series as a separate title.
Investors took the loss of Epix exclusivity as a significant blow to Netflix, pushing down the company’s already slumping shares by $3.79, or 6.4 percent, to close at $55.93. Once a hot commodity on Wall Street, Netflix stock has fallen out of favor since the company alienated its U.S. customers last summer by raising tis prices by as much as 60 percent for a combined subscription to its Internet video and DVD-by-mail services. The shares plummeted from a high of nearly $305 less than 14 months ago.
The latest setback comes at a time when Netflix customer growth had already slowed, and now there’s reason to fear some households may cancel subscriptions that cost $96 annually once they realize that they can see much of the same content and save on shipping costs by opting for Amazon’s less expensive alternative.
Netflix ended June with nearly 24 million Internet video subscribers in the U.S., where it competes against Amazon’s Prime service. Amazon also runs a video service in the United Kingdom called Loveflim that Netflix challenged with its entrance into the British market at the beginning of this year.
Relinquishing exclusive rights to Epix content could help boost Netflix’s recently sagging financial results by reducing its expenses, said Caris & Co. analyst David Miller. He estimates that Netflix may have trimmed as much as $50 million from its annual Epix licensing bill by surrendering the exclusive rights. But analyst Wible of Janney Capital Markets thinks Netflix may have only saved about $20 million annually.
“This is an imperfect solution for Netflix, but with Wall Street’s obsession on the rising costs for content licensing, I would think paying less should assuage shareholders,” Miller said.
TWT Video Picks
By Orrin G. Hatch
Procedural changes impede the chamber's traditional deliberative function
- U.N. condemns Israel, U.S. for not sharing Iron Dome with Hamas
- Border agents cleared of civil rights complaints from illegal immigrant children
- Obama military strategy too weak for future security, panel reports
- Ben Carson takes major step toward presidential campaign
- Porn-surfing feds blame boredom, lack of work for misbehavior
- Pentagon wants extra $19M to equip, train Ukrainian troops
- 'Big Bang' star Mayim Bialik helps send bulletproof vests to IDF
- Feds raid S.C. home to seize Land Rover in EPA emission-control crackdown
- Australia issues arrest warrant for men believed to be homegrown ISIL terrorists
- Iraq Christians get meeting with top Obama aide
Top 10 U.S. military helicopters
Obama's biggest White House 'fails'
Celebrities turned politicians
Athletes turned actors