Market Overview

Why Are Amazon's Streaming Video Announcements Always So Lame?


Is Amazon Prime's success a good excuse for lousy licensing deals?

Early this morning, Amazon (NASDAQ: AMZN) announced that it had signed an agreement with Disney (NYSE: DIS) to stream a number of shows from ABC Studios, The Disney Channel, and ABC Family. This means that Amazon Prime members will soon be able to stream the following shows at no additional charge:

  • Prior seasons of current ABC hit series “Grey's Anatomy”
  • All episodes of recent ABC favorite “Lost”
  • Prior seasons of Disney Channel's popular animated series “Phineas & Ferb”
  • Prior seasons of ABC Family's groundbreaking series “The Secret Life of the American Teenager,” including the most recently aired episodes from summer 2011
  • Prior seasons of Marvel's animated shows “Spider-Man,” “X-Men Evolution,” “Thor & Loki: Blood Brothers” and “Iron Man: Extremis”
  • All episodes of ABC Family's “Greek”
  • All episodes of “Felicity” from ABC Studios

Now I know that Amazon thinks that these shows are worth bragging about. But aside from being completely wrong about that assessment, Amazon must also deal with the fact that Netflix (NASDAQ: NFLX) just got the same deal. Oh sure, there are a couple different shows across the two streaming video platforms. But if one or two minor differences were all it took to persuade consumers, they'd all be piling into Hulu.

Clearly that's not the only factor. More likely than not, Amazon is using today's announcement as a way to remind customers that Prime is competitive, relevant, and worth keeping. You know, just in case somebody was thinking of jumping ship. But not these customers – if they came to Amazon after leaving Netflix, it's safe to say they are staying put.

Easier Said Than Done

In Amazon's defense, licensing agreements are not easy to get. There are many companies fighting for these agreements in the streaming world, many more in premium cable, and dozens more from basic cable networks. With so many options available, movie studios and TV networks have to be choosy about content distribution. That's why you can't subscribe to the Time Warner-owned (NYSE: TWX) HBO and still get the benefits of Starz (NASDAQ: LSTZA). Both channels have worked hard to acquire a unique lineup of content that will attract potential customers – and thus, new subscribers.

Further, the digital space is still very new, and many companies are still apprehensive about putting their content online. That's why only select episodes of The Middle can be found on Hulu and, and why Suburgatory was put on a several week delay. Modern Family, ABC's number-one comedy, wouldn't have made it onto Hulu if the showrunners had gotten their way. Thankfully, they didn't. And they should be glad they didn't, because without the Hulu, I wouldn't have had any way of catching up and may have never started watching the show. (FYI: I'm now a diehard fan who watches every week and purchased the first two seasons on DVD.)

But even if every TV network recognized the benefits of streaming their shows online, it would still be impossible for Amazon to acquire the rights to every series unless it was willing to pay extra money for them. Right now, no company has the desire to do that.

The problem that I see is that while many people come to Amazon Prime first for the overall benefits (such as free two-day shipping), they aren't coming to Amazon specifically for its streaming video lineup. Don't get me wrong, the lineup is getting better. But the progress has been snail-like at best.

Plus, there is still the issue of paid versus free versus Prime content. Right now there are a number of behind-the-scenes features (and, earlier this year, one random episode of Red Shoe Diaries) that anyone can view for free. Then you have the thousands of videos that all consumers have to pay to rent, regardless of their subscription status. Finally you have the Prime subscribers, who are given access to a whole other batch of videos – all free, provided they pay the annual fee of $79.

Long-term, Amazon may prove to have the best streaming service available. When combined with the Kindle Fire, it could be unstoppable.

For now, however, there are too many too many gimmicks to make Amazon Prime the leading streaming video service.

Follow me @LouisBedigian

Posted-In: ABC Family ABC Studios Amazon Amazon Prime disney Kindle Fire The Disney ChannelTech Best of Benzinga


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