Ama­zon chal­lenges Net­flix by tak­ing its video stream­ing ser­vice global

China Daily (USA) - - BUSINESS - By BLOOMBERG

Ama­zon.com Inc is pre­par­ing to take its video stream­ing ser­vice world­wide in a chal­lenge toNet­flix Inc, the world’s largest paid on­line TV net­work.

Ama­zon, which cur­rently offers the ser­vice in only a hand­ful of coun­tries, an­nounced the plans last fort­night in a blog post about “The Grand Tour,” a lav­ish newre­al­ity show fea­tur­ing the for­mer stars of BBC’s pop­u­lar “Top Gear”.

“In De­cem­ber, the show will premiere in 200 coun­tries and ter­ri­to­ries around the world, ex­clu­sively on Ama­zon,” the com­pany wrote on its web­site. Chief Ex­ec­u­tive Of­fi­cer Jeff Be­zos also men­tioned the plans on Twit­ter.

Ama­zon, the world’s big­gest on­line re­tailer, has spent bil­lions of dol­lars li­cens­ing pro­gram­ming and pro­duc­ing orig­i­nal shows and movies as part of its Prime ser­vice. Cus­tomers who pay $99 a year for free ship­ping and other ben­e­fits get ac­cess to a li­brary of new and older con­tent at no added cost.

The ex­pan­sion of the Seat­tle­based com­pany’s video ser­vice is one of the big­gest chal­lenges yet to Net­flix, which op­er­ates in more than 190 coun­tries af­ter com­plet­ing its in­ter­na­tional An em­ployee roll­out in Jan­uary. It is avail­able ev­ery­where ex­cept Syria, Demo­cratic Peo­ple’s Repub­lic of Korea, China and Crimea, the com­pany said at the time.

Sally Fouts, an Ama­zon spokes­woman, de­clined to com­ment.

Michael Pachter,

an­a­lyst at Wed­bush Se­cu­ri­ties Inc

The on­line re­tailer has funded its video ser­vice to in­crease sales of other prod­ucts such as shoes, laun­dry de­ter­gent and books. Peo­ple who watch videos on Ama­zon are likely to stick around and shop for other prod­ucts as well.

To of­fer video ser­vice around the world, Ama­zon­has to ob­tain global rights and sat­isfy lo­cal reg­u­la­tors. The com­pany be­gan seek­ing world­wide rights to shows this year, a sign of its plans to ex­pand, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter who weren’t au­tho­rized to speak pub­licly and asked not to be iden­ti­fied.

It makes sense for Ama­zon to push its orig­i­nal pro­gram­ming in other mar­kets, but se­cur­ing the rights to dis­trib­ute its en­tire cat­a­log of movies and shows world­wide would be ex­pen­sive, said Michael Pachter, an­a­lyst at Wed­bush Se­cu­ri­ties Inc.

“They’re not pay­ing FX to run ‘Jus­ti­fied’ in Scan­di­navia or Gabon,” Pachter said. “The stuff they own, sure, why not.”

Stream­ing video ser­vices are pop­u­lar in de­vel­oped coun­tries, es­pe­cially the West. For­eign mar­kets where fewer peo­ple have ac­cess to fixed broad­band in­ter­net pose more of a chal­lenge.

Ama­zon ear­lier this year be­gan selling a stand­alone video ser­vice to com­ple­ment the ex­ist­ing prod­uct, which is an add-on to its Prime sub­scrip­tions.

pre­pares a box of Dirt Devil prod­uct for pack­ag­ing and dis­patch at the new Ama­zon Inc “Ful­fil­ment Cen­ter” in Bielany Wro­clawskie, Poland, in this file photo. They’re not pay­ing FX to run in Scan­di­navia or Gabon.”

PRO­VIDED TO CHINA DAILY

Prince An­drew pushes a but­ton to re­ceive a gift from Run the ro­bot at the open­ing cer­e­mony of a ven­ture cap­i­tal plat­form in Bei­jing on Oct 26.

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