Amazon to Offer HBO Shows on Prime - Analyst Blog

E-Commerce giant Amazon.com Inc. AMZN has announced a deal with Time Warner Inc.'s HBO network to extend the archive of television shows and films currently available on its streaming video site, Amazon Prime Instant Video.

Amazon Instant Video is a digital video streaming and download service that lets users rent, buy or subscribe to a range of video content.

The deal will make Prime Instant Video the exclusive online subscription service to stream all episodes of HBO shows — The Wire, The Sopranos, Deadwood, Six Feet Under, Rome, Eastbown & Down, Enlightened and Flight of the Conchords — online without any HBO subscription, starting May 21. Additionally, the previous seasons of current shows such as Girls, The Newsroom and Veep will be available on Prime Instant Video three years after they are broadcasted on HBO.

We believe enhancing the video archive is one of the key strategies of Prime Instant Video. The deal is the latest effort by Amazon to strengthen its position versus Netflix NFLX, the leading online video subscription service in the United States. According to a recent report from Qwilt, the online retail giant's streaming video service ranks third in the industry, after Netflix and YouTube. The strong line-up of popular HBO shows will give Amazon a competitive advantage over these streaming services.

The online retailer has been consistently upgrading and promoting movies and television shows on its streaming video service. Over the past 12 months, Amazon has entered into a number of deals with every major Hollywood studio, as well as some of the major cable networks. In Jan 2014, Amazon signed a deal with CBS Corporation CBS to stream the new CBS Television series Extant, a mystery thriller about a female astronaut, produced by Steven Spielberg's Amblin Television.

Amazon is one of the leading players in an extremely fast-growing market. In fourth-quarter 2013, Amazon's revenues of $25.6 billion were up sequentially as well as from the year-ago quarter. Management attributed the revenue increase to the growing consumption of digital content across different categories owing to the advantageous value proposition Amazon provides its customers.

Amazon's shares currently sport a Zacks Rank #2 (Buy). Other stocks that have been performing well and are worth a look include Orbitz Worldwide OWW and IAC/InterActiveCorp IACI. All these stocks sport a Zacks Rank #2 (Buy).