Livestreaming biz heats up

After taking a number of body blows following its decision to hike fees and split its streaming and DVD operations, Netflix is rallying back, announcing a groundbreaking agreement giving it exclusive first-run rights for with DreamWorks Animation’s feature films and television specials.

Amazon, meanwhile, responded with a new partnership for its own streaming service, bringing 2,000 Fox films and television episodes to its Amazon Prime Instant Video program.

The moves both signal the growing importance (and competitive nature) of the streaming market. Netflix has long believed streaming is the future of home video delivery and pioneered the cafeteria-style delivery method. Amazon was a latecomer to the market, but by pairing free streaming with its premium membership program (which also includes free two-day shipping), the company has begun to make an impact.

The Netflix/DreamWorks partnership will begin in 2013. (Current partner HBO agreed to release DreamWorks from its current contract two years early.) The move will put the company directly in competition with pay cable channels and represents the first time a studio has opted for Web streaming over pay television.

”This arrangement allows us to get more value for our content while giving us a greater degree of flexibility in how we distribute it across multiple platforms in today’s evolving digital world,” said Jeffrey Katzenberg, Chief Executive Officer of DreamWorks Animation.

DreamWorks Animation has three releases slated for 2013: ”The Croods,” ”Turbo” and ”Peabody and Sherman”. Catalog titles, such as ”Kung Fu Panda” and ”MegaMind,” will become available over time, the companies said.

The value and length of the partnership were not announced.

Amazon’s deal with Fox will help fill some noticeable gaps, adding fare such as ”The X-Files,” ”Buffy the Vampire Slayer,” ”24” and ”Arrested Development” to the Amazon Prime lineup. Netflix will continue to stream those shows, but Amazon will add a few exclusives, such as ”The Wonder Years”.

”Since launching earlier this year, we have now doubled the number of titles available in Prime instant videos, and there’s still more to come,” said Amazon CEO Jeff Bezos.

Amazon has been striking deals with several new providers in recent months, most recently adding NBCUniversal Domestic TV Distribution (and titles such as ”Eternal Sunshine of the Spotless Mind,” ”Elizabeth,” and ”Gosford Park”) in late July.

Prime Instant Video is a streaming service the company offers to members of its Amazon Prime service. Members pay $79 per year for free two-day shipping as well as the free video. Even if they never take advantage of that once, the monthly cost for this streaming service works out to $6.50 per month, $1.50 less than Netflix’s least expensive service.

Netflix and Amazon are the leading companies in the streaming space right now, but plenty of competitors are right behind them. Apple, Walmart-owned Vudu and Dish Network (which last week announced a Blockbuster-branded streaming service for subscribers to its satellite offerings) are right behind them.

Content providers are taking advantage of this competition and negotiating top dollar for partnerships. Netflix partner Starz, which offers streaming rights for Disney and Sony films, walked away from the table with Netflix earlier this month when the two companies were unable to renegotiate their deal. The partnership is expected to dissolve next February.

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