Amazon Inks Content Deal with Aardman Animations - Analyst Blog

Amazon.com Inc. AMZN has announced a content licensing agreement with Aardman Animations to enrich the archive of television shows and short film series currently available on its streaming video site, Amazon Prime Instant Video.

Amazon Instant Video is a digital video streaming and download service that lets users rent, buy or subscribe to a range of video content.

The deal will make Prime Instant Video the exclusive online subscription service to stream four television and short films — Wallace & Gromit, Shaun the Sheep, Timmy Time and Rex the Runt. Also, the new shows Shaun the Sheep and Timmy Time series will be added to Prime Instant Video.

Amazon has been striving to boost its digital media sales and attract new users. The addition of Shaun the Sheep and Timmy Time will boost its kids' program line-up making Prime Instant video service more attractive to viewers.

Earlier this month, Amazon teamed up with HIT Entertainment, a subsidiary of Mattel, Inc. to make the immensely popular cartoon series, Fireman Sam, available for streaming and downloading on Amazon Prime Instant Video. Additionally, in May, the company announced that its film production division, Amazon Studios, will premiere three original children's TV series, Tumble Leaf, Creative Galaxy andAnnedroids — its first ever — on Prime Instant Video.

We believe that expanding the video archive is one of Amazon's key strategies. Prime Instant Video now offers more than 2,00,000 movies and TV episodes to Amazon Prime members for streaming on all Amazon's platforms, including Kindle Fire and Fire HD, as well as Apple's AAPL iPad, iPhone and iPod touch. It will also be available on Roku set-top boxes, Microsoft's MSFT Xbox 360s, Sony PlayStation 3s and Nintendo Wiis and Wii Us.

Thus, the addition of these new kids' shows to Amazon's portfolio is expected to give it a competitive edge over Netflix NFLX, which already has a popular kids' show section. Moreover, it will help Amazon to expand its footprint in the growing streaming market at a much faster rate.

Currently, Amazon carries a Zacks Rank #3 (Hold).

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