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Amazon Steps Up Netflix, Hulu Rivalry With CBS TV Accord

Amazon Boosts Netflix, Hulu Rivalry With CBS Deal
Amazon.com Inc., escalating its competition with Netflix Inc. and Hulu LLC, reached an agreement allowing customers to watch thousands of the CBS television shows online. Photographer: Joshua Lott/Bloomberg

July 20 (Bloomberg) -- Amazon.com Inc., escalating its competition with Netflix Inc. and Hulu LLC, reached an agreement allowing customers to watch thousands of the CBS television shows online.

The non-exclusive agreement with CBS Corp. adds 2,000 episodes of shows, including full seasons of “Numb3rs” and “Medium” at no additional cost to subscribers of the Amazon Prime service, the world’s largest online retailer said today in a statement. Other terms of the deal weren’t disclosed.

Amazon Prime is a membership program that gives subscribers discounts on shipping for an annual fee of $79. In a push to challenge Netflix and Hulu, Amazon said in February it would offer Prime customers unlimited access to an online library. The CBS deal expands that library to more than 8,000 movies and TV shows. Netflix offers more than 20,000 movies and TV shows online, according to Steve Swasey, a spokesman.

Hulu, a Los Angeles-based Web service that streams TV shows, is soliciting takeover bids. The company, owned by Walt Disney Co., News Corp. and Comcast Corp.’s NBC Universal, is offering suitors five years of access to shows, including two years of exclusivity, two people with knowledge of the situation said July 19.

“This agreement could diminish the likelihood of Amazon being a buyer of Hulu since it’s going down its own path and doing separate deals with content vendors,” said James Cordwell, an equity analyst at Atlantic Equities in London who recommends Amazon shares. Amazon spokeswoman Mary Osako didn’t return a call seeking comment.

Amazon, based in Seattle, fell $2.51 to $215.55 at 4 p.m. New York time in Nasdaq Stock Market trading. The shares have gained 20 percent this year. CBS climbed 78 cents to $28.74 on the New York Stock Exchange and has increased 51 percent this year.

Netflix, based in Los Gatos, California, declined $5.89 to $281.40 on the Nasdaq and has risen 60 percent this year. CBS and Netflix announced a two-year, non-exclusive licensing agreement for streaming content in February.

To contact the reporter on this story: Alex Sherman in New York at asherman6@bloomberg.net

To contact the editor responsible for this story: Peter Elstrom at pelstrom@bloomberg.net

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