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Amazon (AMZN) And Viacom (VIA) Add Further Pressure On Netflix (NFLX)

|Includes: Amazon.com, Inc. (AMZN)

Amazon announced Wednesday that it will expand the selection of its streaming service catalog through a new rights agreement with Viacom. Included in the deal are Paramount movies, as well as shows from Comedy Central, MTV, VH1, Comedy Central, and Nickelodeon, to name a few.

The new deal will add roughly 2,000 titles (approximately a 15% increase) to Amazon's Instant Video service, effectively making them a larger competitor in the on-demand streaming content service industry. The deal doesn't give Amazon exclusive rights to the content, as many of the titles are already available on other services such as Netflix and Hulu.

Amazon is betting that the increase in their library will, in part, help bolster sales of their Kindle Fire line of computer tablets. Subscribers to Amazon's Prime service will now be able to watch popular shows such as MTV's "Jersey Shore," TV Land's "Hot in Cleveland," and kids shows like "Dora the Explorer," amongst others. Amazon currently sells their Kindle Fire at a loss, but makes up for it on sales for products and content for the Fire.

Amazon has also recently inked deals with others, including News Corp.'s Fox and Warner Bros. to add more films and shows to its offerings. "You either have to build the device that everyone wants or have a price point that excites people and an ecosystem that goes around that," commented Kerry Rice, an analyst with Needham & Co. in San Francisco, who recommends holding Amazon shares.

In a broader scope, the deal puts additional pressure on Netflix, especially with the recent deal struck between Verizon and Coinstar, parent company of video kiosk giant Redbox, to launch initiatives of their own to expand their presence in the on-demand video space.

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