More bad news for Netflix: On Wednesday, one of the streaming service's chief rivals, Amazon Prime, announced a lucrative new partnership deal with cable company Viacom. The blockbuster deal lets Amazon stream programming from Comedy Central, MTV, and Nickelodeon — including shows like Jersey Shore, Chappelle's Show, and Dora the Explorer — and increases Amazon's streaming library to 15,000 titles. Considering Netflix's recent inability to hold onto crucial content partnerships with companies like Starz, does this deal signal that Amazon is poised to topple Netflix?
Amazon is certainly on the right track: "Amazon Prime is easily one of the best deals you can get online," says E.D. Kain at Forbes, giving customers streaming access to thousands of video titles and free two-day shipping on Amazon goods — all for $79 per year. "I'd gladly cancel my Netflix subscription" and just use Amazon if the latter's streaming library becomes as robust as Netflix's. And at the rate Amazon's going, that could happen soon. "Netflix will need to drastically improve its streaming options if it wants to remain competitive."
"Amazon's Viacom deal puts pressure on Netflix"
But Amazon needs to unbundle streaming from Amazon Prime: This is undoubtedly a huge coup for Amazon, says Ryan Lawler at GigaOm, particularly because Nickelodeon programming will win over subscribers with kids. But if Amazon really wants to compete with Netflix, it needs to unbundle its video streaming service from Amazon Prime. Perks like free two-day shipping are nice, but "not everyone is interested in that part of the offering." Amazon needs a standalone streaming service.
"With Viacom deal, Amazon looks like a real competitor to Netflix"
And it must get into the original content business: Amazon and other streaming sites are certainly encroaching on Netflix's dominance, says Sarah Perez at TechCrunch. But Netflix is wisely branching out in ways that its competitors are not. The company is funding original programming — it just debuted its first scripted series, Lilyhammer — which means it doesn't have to rely entirely on subscription deals to woo customers. "Amazon will eventually have to do the same to continue to compete in the space, let alone come out on top."
"Amazon & Viacom announce streaming video deal"