Amazon's Kindle Fire: The next gaming console?

Amazon.com has been quietly recruiting game developers, posting dozens of jobs on its site.

Why this burst of interest in game design from the world's largest online retailer? P.J. McNealy, founder of Digital World Research, believes that Amazon is amassing resources to potentially become a force in mobile social gaming.

While traditional video games aren't going away, that part of the industry is also not growing very fast. Mobile and social games, however, are booming. Gaming on tablets, in particular, is taking off.

Amazon is well positioned to capitalize on that because it is the No. 2 player in the tablet market, with its array of rapidly selling Kindle devices trailing only Apple Inc.'s iPads, McNealy suggested in a research note published Monday.

The idea is that Amazon could become the next big gaming platform -- acting as a hardware and software gateway for games in the same way that the PlayStation, Wii and Xbox have for decades.

"Amazon is quietly lurking, and gaining strength," McNealy wrote. "And they’re hiring."

Positions being offered include level game designer, digital video game software engineer and "game changer." In one job posting, Amazon said, "We've been hard at work building various games." The post said the company wants "a creative Game Designer who knows what it takes to make a great game and has experience doing so." The jobs are generally located in Seattle and Orange County. 

Amazon is not new to games. Aside from being one of the largest purveyors of disc-based games, it has for years operated a digital game download service on its website -- delivering casual and hard-core computer games. It also has an App Store with more than 6,000 applications for Android and Kindle devices, including such popular games as Angry Birds.

Though Amazon did not specify in its job postings what types of games it's working on, McNealy posits that the next battleground is social games. Facebook currently reigns supreme in this genre, with hundreds of millions of people playing on its social network each month. Could Amazon be eyeing the No. 2 spot? 

The company did not reply to a message from The Times seeking comment. 

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Photo: The lineup of Kindle devices from Amazon. Credit: Amazon.com Inc.

Home entertainment spending rises for the first time since 2008

 

Spending on home entertainment totaled $3.9 billion in the third quarter of this year, up 5% from a year earlier, marking the first increase since the recession took hold in 2008.

Purchases of recorded movies fell to $1.7 billion in the latest period, down 4% from the third quarter of 2010, a new report from Digital Entertainment Group shows. 

The continued drop in consumer purchases of movies came despite the growth in popularity of Blu-ray discs. Sales of films Blu-ray discs, an increasingly popular format, were up 58%, but that wasn't enough to offset a decline in DVD sales.

The video rental market also was soft, staying relatively flat at $1.8 billion. The closing of hundreds of Blockbuster outlets helped push rental revenue from physical stores down 29%. The loss of Blockbuster stores was partially offset by gains in rentals at Redbox kiosks.

Digital revenue, increasingly important for the home entertainment business, showed double-digit percentage gains. Spending on online rentals and purchases jumped 56% to $811 million as subscription streaming services such as those offered by Netflix and Amazon.com gained popularity. The increase also reflects a decision by Netflix to report its revenue from streaming separately from its movies-by-mail revenue.

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Photo: Amazon.com is bulking up its Amazon Prime service, in part to provide entertainment content for the company's new Kindle Fire tablet. Credit: Emile Wamsteker / Bloomberg 

Disney sells to Amazon, renews with Netflix

This post has been corrected. See bottom for details.

Walt Disney Co. has gotten on the Amazon gravy train.

Looking to acquire content for its video streaming service Prime Instant, Amazon has struck a deal with Disney's ABC broadcast network as well as its cable channels including Disney Channel, ABC Family and some older shows made by ABC Studios including "Felicity."

The short-term agreement is much smaller than Disney's current arrangement with Netflix, but the structure is similar. Like Netflix, Amazon will not get access to current shows in season.

The Netflix deal, which was also given a short-term renewal by Disney, is broader in terms of content. Amazon gets access only to past episodes of one current ABC series, "Grey's Anatomy." Netflix gets past episodes of the medical drama, its spinoff "Private Practice" and "Desperate Housewives."

Besides Disney, Amazon has also signed agreements with CBS, Fox, Warner Bros., Sony and NBCUniversal. It is making a big push for content to help boost sales of its new Kindle Fire tablet.

For all the big entertainment companies, Netflix, Amazon and other streaming services have turned into a vital new revenue stream. They need content for their streaming business and are throwing cash for old TV shows.

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Photo: Jesse Williams, left, Sandra Oh and Kevin McKidd in the "Song Beneath the Song" episode of "Grey's Anatomy." Credit: ABC

For the record: A previous version of this post incorrectly suggested that Amazon would get the rights to this season's "Grey's Anatomy." Amazon only has the rights to library product from Disney.

 

Julia Child, newer PBS content come to Amazon's Netflix competitor

Continuing to add television programs to help it compete with Netflix, Amazon.com is putting Julia Child's "The French Chef" on the Internet for the first time.

The classic 1960s cooking show will make its digital debut on Amazon Prime Instant Video, the online retail giant's subscription video streaming service.

"The French Chef" will become available in November as part of an expanded deal announced Wednesday that makes it and other PBS shows such as "Frontline," "Washington Week" and the recent Ken Burns documentary "Prohibition" available on Amazon within days of their original airing.

The agreement comes as Amazon prepares for the November launch of its Kindle Fire tablet, an iPad rival that the company is hoping will help persuade users to sign up for its Prime subscription service. 

It also comes as Netflix, for which Amazon Prime is the most powerful competitor, is newly vulnerable in the wake of a price hike and aborted move to separate its DVD service from Web streaming that angered many of its 24.6 million U.S. customers and prompted the company to warn investors that it expects to lose about 600,000 customers in the last quarter.

Investors will be closely watching Monday when Netflix reports its first quarterly results, and subscriber numbers, since the events of the past few months.

Amazon, which already offers older seasons of a number of PBS programs including "Nova," "Antiques Roadshow" and "Mister Rogers' Neighborhood,' will now get recently aired episodes of the shows under the new pact.

Many commercial networks have avoided making shows available to Amazon or Netflix in the same season they air out of fear that doing so could harm television ratings. But that's apparently not a concern for PBS, particularly with its news programs that aren't rerun.

In total, Amazon said its Prime Video will soon have about 12,000 movies and television shows available, more than double the 5,000-plus titles it launched the service with in February. Netflix, by contrast, has more than 13,000 titles, according to the tracking website InstantWatcher. Netflix itself does not disclose the size of its streaming video library.

Some, but not all, of the PBS content that Amazon is adding is also available on Netflix.

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Photo: Julia Child in "The French Chef." Credit: Paul Child

Fox strikes licensing deal with Amazon to stream movies, TV shows

News Corp.'s 20th Century Fox has reached a licensing deal that adds about 2,000 films and television shows from its library to Amazon.com's instant streaming service, bringing to 11,000 the number of titles available through Amazon Prime.

Amazon Prime members, who pay a $79 annual fee, gain  commercial-free access to such films as "Mrs. Doubtfire," "9 to 5" and "Butch Cassidy and the Sundance Kid," as well as older television series including "24," "The X-Files" and "Buffy the Vampire Slayer."

Consumers who are not Amazon Prime members can rent or purchase movies and TV shows from Amazon through its Instant Video stream service, at prices that start at $3.99 for new releases. Amazon offers more than 100,000 new and older titles through its paid service.

The online retailer is beefing up its catalog as it seeks to compete with Netflix, which just secured the rights to stream DreamWorks Animation films. Amazon has secured licensing deals with CBS, NBCUniversal, Sony and Warner Bros.

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Photo: Matthew Lawrence, left, Lisa Jakub, Robin Williams, Mara Wilson and Sally Field in "Mrs. Doubtfire." Credit: Phil Bray

Amazon's deal with NBCUniversal could open doors for new tablet

Amazon.com added Universal Pictures movies to its digital video offerings as it lays the groundwork for its forthcoming media tablet.

Such content deals will be critical for Amazon, as it prepares to introduce a new tablet for watching accessing movies and TV shows, reading books and listening to music. The media device is expected to debut in October, and will compete directly with Apple Inc.'s hot-selling iPad.

"The tablet is really a defensive move," said Colin Gillis, research director for BGC Financial. "The tablet is becoming the front door for commerce. ... Amazon wants to be there. It doesn't want to get boxed out by anybody, including Apple."

The online retailer reached a licensing deal with NBCUniversal that will bring  to 9,000 the number of movies and TV shows that customers can watch instantly, at no additional charge, through the Amazon Prime membership program. This program also gives subscribers a shipping discount for an annual fee of $79.

Among the movies to be offered through Amazon's service are "Eternal Sunshine of the Spotless Mind," "Babe" and "Being John Malkovich."

The Amazon announcement is another sign of intensifying competition in the digital marketplace, reflecting changes in how consumers are entertained. Earlier this week, Wal-Mart Stores Inc. said it would begin offering 20,000 movies and TV shows to rent or purchase through its Walmart.com website.

"We are very excited to offer Prime members popular Universal films at no additional cost," Cameron Janes, director of Amazon Instant Video, said in a statement.

The online retailer still has a long way to go to catch up with services like Netflix, which makes about 20,000 movies and TV shows available online to subscribers.

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Photo: Catherine Keener and John Cusack the film "Being John Malkovich." Credit: Melissa Moseley / Gramercy Pictures

Amazon.com adds Universal Pictures movies, takes aim at Netflix

Amazon.com has added Universal Pictures movies to Amazon Prime as it amps up the online streaming service to better compete with rivals Netflix Inc. and Hulu.

The licensing deal with NBCUniversal brings to 9,000 the number of movies and TV shows that customers can watch instantly, at no additional charge, through the Amazon Prime membership program, which also gives subscribers a shipping discount for an annual fee of $79.

Among the movies to be offered through Amazon's service are "Eternal Sunshine of the Spotless Mind," "Babe" and "Being John Malkovich."

The Amazon.com announcement is another sign of intensifying competition in the digital marketplace, reflecting changes in how consumers are entertained. Earlier this week, Wal-Mart Stores Inc. said it would begin offering 20,000 movies and TV shows to rent or purchase through its Walmart.com website.

"We are very excited to offer Prime members popular Universal films at no additional cost," Cameron Janes, director of Amazon Instant Video, said in a statement.

The online retailer still has a long way to go to catch up with services like Netflix, which makes about 20,000 movies and TV shows available online to subscribers.

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Photo: Jim Carrey and Kate Winslet star in "Eternal Sunshine of the Spotless Mind." Credit: David Lee / Focus Features

CBS, Netflix extend partnership to Canada and Latin America

Beginning in September, Netflix customers in Canada will be able to stream episodes of several CBS owned television shows including "Numb3rs," "Twin Peaks" and episodes of past seasons of "Dexter."

The two-year, nonexclusive international licensing deal -- announced Wednesday -- expands a partnership between the two companies, which was signed earlier this year. The initial agreement covered TV show streaming by Netflix users in the U.S.

Financial terms of the international deal were not disclosed.

Netflix has been bolstering its offerings to compete with rival services. On Wednesday, episodes of the critically acclaimed AMC series "Mad Men" become available to Netflix's U.S. subscribers as part of a syndication deal that the Los Gatos-based company structured with studio Lionsgate.

Netflix primarily has access to older programming that CBS owns, including the original "Star Trek" series. The television company tightly guards online views of episodes of its current network hits, including "NCIS" and "Hawaii Five-0."  It does not make the latest episodes of shows available to Netflix, Hulu or Amazon.com.

CBS' strategy is designed to protect its TV ratings and the advertising revenue it receives when viewers watch programming on TV.  But CBS has been eager to structure deals to give companies access to its older titles that no longer air on television.

Later this year, users in Latin America also should be able to watch "Dexter" and other CBS titles online.

Earlier this month, Netflix said it would be launching movie and TV show streaming services in 43 countries in Central America, South America and the Caribbean. Netflix's arrangement with CBS represents it first international deal with a major content supplier.

Netflix said that CBS-owned  programming including past seasons of "Medium," "90210," or the Showtime programs "Nurse Jackie" and "Dexter" will be included in Netflix's $7.99 a month streaming plan.   

CBS Corp. owns the premium Showtime cable channel. 

"We are pleased to be partners with Netflix as they roll out their superb service to new markets," said Armando Nunez, president of CBS Studios International. "This new arrangement -- which does not compete with U.S. ratings or Showtime's domestic subscriber base -- underscores the popularity of CBS content around the world, and illustrates yet another meaningful way for us to realize incremental value from our vast library of content."

-- Meg James

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Photo: Michael C. Hall in a scene from "Dexter." Credit: Randy Tepper / Showtime

CBS Corp. licenses older shows to Amazon.com

Amazon.com is busy stocking its shelves with more programming and will soon offer streams of older CBS-owned television shows, including "Frasier," "Cheers" and "Star Trek," to its online customers.

The move, announced Wednesday, represents the online retail giant's most significant licensing agreement since launching its Amazon Prime subscription service in February to compete with Netflix.

Seattle-based Amazon is eager to become a bigger player in the online programming space, and is seen as a possible buyer of the popular video site Hulu, which is on the block.

Financial terms and the length of the Amazon-CBS deal were not disclosed, and the arrangement is nonexclusive.  

Marci Ryvicker, a media analyst with Wells Fargo Securities, calculated that the Amazon deal would bring CBS more than $100 million in revenue over the term of the agreement.

CBS has firmly held on to the rights of its current series, so episodes of "NCIS," and "Hawaii Five-0" are not part of the arrangement.  Earlier this year, CBS negotiated a similar licensing deal with Netflix. This allows Amazon to offer some of the same shows that Netflix currently provides. 

"We believe that this agreement is structured slightly differently than the Netflix deal," Ryvicker wrote in a report Wednesday morning. "It is a smaller percent of CBS' library; is shorter term (we believe 18 months versus 24 months) and likely has some sort of per-subscriber structure in addition to an upfront payment."

"These differences make a lot of sense to us given that Amazon is still in a ''build-out'' phase when it comes to its streaming TV offering," Ryvicker said.

Beginning next month, customers who subscribe to the Amazon Prime streaming service will have access to episodes of 18 TV series owned by CBS -- including Showtime's "The Tudors," and the complete "Star Trek" franchise. Customers pay a flat $79 a year for Amazon's streaming video service, a price that also includes free two-day shipping for many products bought on the site.

With the deal, Amazon will have more than 8,000 movies and television episodes on its Prime service. That's still significantly less than the estimated 20,000-plus available from Netflix, which doesn't disclose the exact number.

Later this summer, dozens of CBS shows also will be made available to Amazon's Instant Video offering, in which viewers can pay a fee of about $1.99 to order a stream of a single episode.

"We're excited to add thousands of popular CBS programs to our already great selection, all of which stream at no additional cost to Amazon Prime members," Jeff Bezos, Amazon.com chief executive, said in a statement.

CBS Corp. Chief Executive Leslie Moonves added, "This new agreement represents another meaningful way for us to realize incremental value for CBS' content."

Analyst Ryvicker concluded: "We believe that in both deals, the economics are very favorable for both CBS and its [online video distribution] partners." 

 -- Meg James and Ben Fritz

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What's next for Hulu?

Photo: Kelsey Grammer in "Frasier." The CBS-owned television show along with several other CBS TV series will be available to Amazon Prime streaming customers next month. Credit: Gale Adler / Paramount Pictures

What's next for Hulu?

News Corp., Walt Disney Co. and NBCUniversal have been wrestling for more than a year over what to do with their unruly online progeny Hulu.

The answer emerged this week: sell the popular and problematic Internet video site.

But why now?

Analysts said the media owners couldn't help but notice Wall Street's enthusiasm for the initial stock offerings of social media site LinkedIn and the anticipated public offerings of Facebook and couponing service Groupon.

“The capital markets are wide open, there is asset value in Hulu today, and it will last as long as the distribution rights are extended," said Jordan Rohan, a media analyst with Stifel Nicolaus & Co.  In addition, he noted, "Yahoo and other major companies have discovered that the high-end online video space is incredibly valuable, and it always will be."

There could be another explanation too.  For months, Hulu's chief architect, Chief Executive Jason Kilar, has been lobbying for greater autonomy to operate Hulu as a fast-moving Internet venture, independent of the entertainment conglomerates that are beholden to their traditional businesses.

The media companies' priority has been to preserve their lucrative relationships with cable, satellite and telecommunications companies, which pay $30 billion annually for the right to distribute TV shows to subscribers. That sum dwarfs the $500 million in revenue that Hulu is projecting to bring in this year.

In addition, Providence Equity Partners, which initially contributed $100 million to seed Hulu, probably is looking for a way to recoup its investment.