Amazon Prepares To Take On Netflix - Spokane, North Idaho News & Weather KHQ.com

Amazon Prepares To Take On Netflix

SAN FRANCISCO (Reuters) - Amazon.com Inc's deal to purchase streaming movies from cable network Epix could transform the way such deals are done, thanks to a pay-for-performance sweetener that had not been previously disclosed.

According to an executive directly involved in the deal, Amazon agreed to an earn-out provision payable to Epix over time if the number of subscribers to Amazon's Prime Instant Video service rises above a certain threshold. That comes in addition to a fixed upfront fee, the basis for most subscription video-on-demand deals up to this point.

The generous terms of the deal, announced in September, provide the strongest evidence yet that Amazon is willing to pay up to be a player in this market as it faces a dwindling demand for DVDs - once its core entertainment offering - and tough competition for its Kindle Fire tablets.

Film studios and TV network executives, meanwhile, now have a worthy foil to play against Netflix - once the only major streaming player - and possibly a template for future deals. click here to read more

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