×

Amazon has agreed to acquire Elemental Technologies, a video-encoding and content delivery technology company, to augment its cloud services offerings.

Elemental is being acquired by Amazon Web Services, a subsidiary of the e-commerce company. Terms of the deal were not disclosed. Amazon is paying about $500 million in cash for Elemental, according to a report by The Information citing an anonymous source.

AWS customers include Netflix, which uses the Amazon service for a large portion of its video-streaming delivery. Amazon separately competes with Netflix with Prime Instant Video, an unlimited video-streaming service available to members of its Prime free-shipping program. Amazon last summer bought video-game live-streaming service Twitch for around $1 billion, after Google’s YouTube had been seeking to buy it.

Elemental has more than 700 customers, powering some of the biggest over-the-top TV apps like HBO Go, BBC’s iPlayer, CNNGo, ESPN ScoreCenter, and Sky Go and Sky Now.

Amazon and Elemental will “collaborate on deeper technology integrations and new infrastructure offerings so that media and entertainment companies can evolve their hybrid and cloud models as they continue to innovate their services for viewers,” Andy Jassy, senior VP of Amazon Web Services, said in announcing the pact.

Elemental, based in Portland, Ore., was founded in 2006. AWS said Elemental will continue to operate its business under its existing brand, while expanding the integration of its offerings with AWS and developing new services leveraging customers’ on-premises assets, hybrid architectures and cloud infrastructure.

The acquisition, subject to closing conditions, is expected to close in the fourth quarter of 2015.