Amazon Spends $220 Million to Get Exclusive Streaming Rights to Kids Shows for Prime Subscribers on Kindle Fire and Other Devices

In an open letter posted on its website, Amazon's CEO Jeff Bezos announced that Amazon has just closed a deal with Viacom, giving it the right to broadcast hundreds of kids TV shows on Prime Instant Video.

In addition, the company has gained exclusive rights to stream many of these TV shows on its Instant Video network.

Bezos went on to boast that members of Amazon Prime now have unlimited instant streaming access to the largest subscription library for Nickelodeon and Nick Jr. content online.

Included in the list are over 3,000 episodes from  top-rating children’s programs such as Spongebob Squarepants, Blues Clues, and Dora the Explorer. There are also new shows like Drake & Josh, Big Time Rush, and Bubble Guppies.

Many of these shows had formerly been available on Netflix until the latter allowed its rights to broadcast the Viacom shows expire in May this year. Amazon.com then snapped up the opportunity to bring these programs to its Amazon Prime members.

According a Reuters report, this deal cost Amazon.com $220m, making it the biggest deal that Amazon has ever closed for streaming videos. The same report also states that this deal provides Amazon a greater number of shows than what Netflix had previously gotten from Viacom.

The deal is said to cover a time period of over two years. 

Many of the shows are also available on Kindle Free Time, an Amazon.com service that specifically targets kid viewers.  

Kindle TV on the Horizon? Amazon Is Reportedly Working on a Video-Streaming Set-Top Box for TVs

BREAKING NEWS

April 24, 2013 – In a report earlier today, Bloomberg stated that it has heard from its sources that Amazon is planning to soon release a TV set-top box for streaming multimedia content over the cloud into televisions in customers’ homes. Bloomberg referred to its sources just as "people with knowledge of the matter" because they asked not to be identified.

Reportedly, the device will be released later this year. With the push, Amazon will be competing with Apple and Google, both of which have set-top boxes dubbed "Apple TV" and "Google TV."

Releasing a set-top will give Amazon control over end-to-end delivery of its streaming video offerings, which are currently supported for televisions via third-party set-top boxes, such as Roku, and gaming consoles, such as Xbox and PS3. In addition, Amazon's streaming video offerings are supported by its Kindle Fire product line, which includes the Kindle Fire tablet in 7- and 8.9-inch versions.
 
The report quoted venture capitalist Jason Krikorian, a general partner at DCM, as saying that Amazon's releasing a tablet certainly makes sense given that Amazon has already acquired – and continues to acquire – media content and has millions of existing customers to whom it can easily cross-sell such a device.

The company had made a foray into the consumer electronic hardware business with its successful launch of Kindle eBook and Kindle Fire Tablet devices, both of which are extremely successful. Rumors also indicate that the company is also working on a smartphone.

The set-top device is reportedly being developed in the same R&D center in California, where Amazon also builds Kindle devices. The California subsidiary, called Lab126, is based in Cupertino, which is also the home of Apple's headquarters.

Like Apple and Google, Amazon is trying to expand its apps market. Earlier this year, Amazon had won dismissal of Apple’s claim that the online retailer’s use of the term "app store" for Android device software is false advertising.

While pricing information for the planned set-top box hasn't been released, Amazon has publicly admitted selling the Kindle line of media consumption hardware "at cost," with a goal of making profits by selling digital content. The TV set-top box, which may very well be branded as "Kindle TV," may follow the same logic.

Amazon stock price closed today at 268.78, falling by 0.08%. Amazon plans to announce its Q1 results tomorrow, April 25, after the close of the stock market at 4 PM EST.

Malachy Moynihan, a former vice president at San Jose-based Cisco Systems is in charge of this project. At Cisco, Moynihan had worked at various video-streaming initiatives. He had also worked at Apple for nine years.

Amazon has been able to draw from Silicon Valley's talent pool and has attracted to Lab126 video-streaming leaders, including senior-level engineers and architects from companies such as TiVo and ReplayTV.

Amazon, a leader in online delivery of media products such as books, CDs and DVDs, has been aggressively going after the digital media market. It has been pushing its MP3 download market against the Apple Store. It also launched Kindle, an eBook reader, in 2007, aggressively selling bestselling books at prices lower than physical books (and incurring a loss in many cases, based on its contracts with the publishers) and then launching its self-publishing platform dubbed the KDP.

Now Amazon is pursuing the streaming video market with the same zeal as it had for dominating the eBook market. It offers access to a select list of TV shows and movies offered for free to its Prime members, who also get membership to the Kindle Owners Lending Library for books and free two-day shipping for products.

Like Hulu, a prominent streaming service, Amazon has also set up its own studios to create TV programs and movies. The company also secured exclusive streaming rights to hit shows.

Amazon currently supports competing streaming media services such as YouTube, Hulu, and Netflix on its Kindle Fire tablets, so it is likely that it may do the same on Kindle TV, though it will obviously be optimized for Amazon's own multimedia offerings from its digital media store.

You can access Bloomberg's report here.