Amazon Licenses Loads of Viacom Content

Pact covers material licensed by Netflix in a nonexclusive earlier deal

Hot on the heels of Verizon's announcement that it too would be entering the streaming content wars, Amazon has added a large library of Viacom content to its $79 per year subscription VOD service, Amazon Prime. Amazon will now stream MTV series including Jersey Shore, several seasons' worth of The Real World, and programs from Comedy Central and Nickelodeon including Chappelle's Show and SpongeBob SquarePants.

The two companies have been in something of an arms race for several months, with both inking deals with Disney-ABC TV in October.

Netflix has a few advantages in this fight yet. Amazon's access to Viacom content is less extensive than Netflix's, and Netflix has an exclusive window on SpongeBob for two more recent seasons than Amazon (Netflix has 1-5, Amazon has 1-3). A source described the deal with Amazon as "a subset" of what Viacom provides for Netflix, though because of shifting trends, there will be some Viacom shows exclusive to both parties … at least until the next deal is struck.

Viacom reported a 3 percent drop in ad sales at its cable TV unit last week, largely due to declines at the division's crown jewel, Nickelodeon. On the company's earnings call, CEO Philippe Dauman addressed the theories of equity analysts that Netflix's ad-free Nick content was cannibalizing the kid cabler's viewership.

Dauman roundly dismissed the suggestion, but the debate continues. With Amazon now jockeying for viewers alongside Netflix, it's not clear what, if any, the fledgling streaming industry's impact will be on traditional cable.

Interestingly, among content not included in the deal are two of Comedy Central's biggest series: The Daily Show and The Colbert Report. The comedy news shows, which track current affairs, have been Hulu-exclusive thus far, but as more companies look for ways to distinguish themselves from the competition, especially by grabbing earlier windows on premium shows, library content is likely to take a backseat to more timely material.

Regardless of the scope of the content provided, Amazon is taking advantage of the publicity to push the Kindle. The company's new tablet device is being sold below cost to consumers, and the e-tailer is undoubtedly anxious to prove value by acquiring as many cost-defraying subscriptions as possible.