Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Netflix, Inc. (NFLX),, Inc. (AMZN): What Type of Content Is King in the Video Streaming Wars?

Netflix, Inc. (NASDAQ:NFLX) and, Inc. (NASDAQ:AMZN) are making big bets on the type of content they offer, as more consumers choose video streaming services over traditional pay cable. Amazon signed a multi-year deal with Viacom, Inc. (NASDAQ:VIAB) this week, in an effort to beef up its video library ahead of competitors. Meanwhile, both Netflix, Inc. (NASDAQ:NFLX) and, Inc. (NASDAQ:AMZN) are also heavily investing in original content. Let’s take a deeper look at whether more content, or original content, is better for subscriber growth.

Netflix, Inc. (NASDAQ:NFLX)

Pricey content deals

The reluctance of Netflix, Inc. (NASDAQ:NFLX) to renew its agreement with Viacom, Inc. (NASDAQ:VIAB) gives, Inc. (NASDAQ:AMZN) a leg up in the digital content wars. However, Netflix’s decision is also understandable, given the disturbingly high cost of programming these days. For example,, Inc. (NASDAQ:AMZN) is reportedly coughing up more than $200 million for its new licensing agreement with Viacom, according to Reuters. That would make this Amazon’s priciest content deal to date.

The Viacom deal gives, Inc. (NASDAQ:AMZN) exclusive rights to hundreds of popular shows, including children’s titles like Dora the Explorer and Blue’s Clues. The world’s largest online retailer is sparing no expense these days when it comes to outbidding competitors in the streaming video industry. In February, Amazon extended its content agreement with CBS Corporation (NYSE:CBS). Under the updated terms, CBS Corporation (NYSE:CBS) promised Amazon exclusive rights to the popular TV series Downton Abbey, as well as other notable shows.

While Amazon continues to grow its streaming video library, Netflix, Inc. (NASDAQ:NFLX) is falling behind. Last year, Netflix said goodbye to its Starz titles after negotiations between the two companies hit a wall. More recently, Netflix, Inc. (NASDAQ:NFLX) lost thousands of movies and shows when its agreements expired last month with MGM, Universal, and Warner Bros. This is where original content comes to save the day.

One-of-a-kind programming

Remarkably, Netflix is still generating impressive numbers, despite losing content to competitors. That’s because the company’s big bet on original content is starting to pay off. In fact, Netflix added more than 2 million new subscribers in the quarter when it premiered its first original series, House of Cards. That’s particularly impressive considering Netflix purchased two seasons of this original programming at half the cost of what Amazon recently paid Viacom for non-original content.

Thanks to the success of House of Cards, Netflix is now planning to double its original content lineup in the year ahead. Netflix even locked down a contract with Dreamworks Animation Skg Inc (NASDAQ:DWA) earlier this year, for a Netflix original kids series based on Dreamworks Animation Skg Inc (NASDAQ:DWA)’s animated movie, Turbo, which hits theaters in July.

At this point, Netflix has fewer titles than Amazon, whose digital library has grown to include more than 140,000 videos. However, looking to the future, I suspect compelling original content will be the key differentiator for Netflix.

The article What Type of Content Is King in the Video Streaming Wars? originally appeared on and is written by Tamara Rutter.

Fool contributor Tamara Rutter owns shares of Netflix and The Motley Fool recommends, DreamWorks Animation, and Netflix. The Motley Fool owns shares of and Netflix.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!