Peter Kafka

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Amazon Pulls a Netflix, Adds (Old) CBS Shows

Amazon, which is trying to build up a digital video service that can rival the one Netflix has built, has added a bunch of TV shows from CBS — just like Netflix did earlier this year.

The deal is more or less a replica of the pact CBS and Netflix struck in February: Access to relatively recent CBS shows that aren’t on the air anymore, like “Medium,” as well as library titles the network owns that aired elsewhere, like “Frasier” and “Cheers.” But no “in-season” episodes of anything.

CBS and Amazon aren’t talking about money, but Barclays analyst Anthony DiClemente pegged the value of the CBS/Netflix deal at $200 million over two years. It’s reasonable to assume that Amazon is paying the same rate for its shows, but spending less over all. That’s because the total value of the deal is likely based on Amazon’s subscriber base, which is much lower than Netflix’s.

UPDATE: Wells Fargo analyst Marci Ryvicker pegs the deal at “over $100 million,” over an 18-month term.

Amazon says the new titles will bring its streaming library up to 8,000 titles; Netflix boasts around 20,000 titles for its digital-only library. For now, Amazon’s Web video titles are free to customers who use its “Prime” delivery service, but industry observers assume that library access will also be a big part of the new iPad-like tablet the company is expected to unveil this fall.

Meanwhile, the deal underscores the best-case digital scenario for big media players like CBS — the company gets to take old shows and resell them multiple times (and maybe more, as Microsoft, Apple, and others eye the market), and doesn’t have to worry about cannibalization.

Things get much trickier when consumers decide they want to watch current programming, though. That stuff continues to be worth much more to studios and networks when it runs on broadcast or cable TV, but convincing viewers to play along is getting increasingly difficult.


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