Amazon And CBS Team Up For Digital Distribution Of 'Under The Dome'

Amazon Prime service competing with Hulu for early video streaming services

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Little more than a week after Netflix, Inc. (NASDAQ:NFLX) debuted its game-changing  web series “House of Cards,” other major cable and Internet companies are already jockeying for space in the “future of television” spotlight. CBS Corporation (NYSE:CBS) and Amazon.com, Inc. (NASDAQ:AMZN) announced Monday that the two companies had partnered for a unique distribution deal for a 13-episode TV series “Under the Dome” based on a popular 2009 Stephen King novel of the same name.

The deal gives Amazon exclusive rights to show episodes of “Under the Dome” following their original air date on the CBS network. “Under the Dome” will premiere on June 24 2013, and each episode will be freely available for online streaming for three days afterwards on the network’s website, CBS.com. The three day time window, an industry standard known as “C3,” is used by networks in order to maintain exclusivity to better calculate ratings for advertising fees. Come June 28, however, the first episode will only be available on Amazon’s Prime Instant Video service -- the company’s online portal for video rental and viewing that serves as its main rival to other premium video services like Netflix and Hulu.  

This is the first time that Prime Instant Video has gotten access to an in-season TV show, not to mention exclusive access to it. Current Amazon prime users, who pay $79 annually for the premium service that offers several benefits such as free two-day shipping, will get access to new episodes of “Under the Dome.” This gives the company an important advantage over Hulu, which has become the de facto online video service for many viewers eager to watch the latest episode of their favorite TV shows but willing to wait a few days for access rather than paying for a pricey cable package or downloading pirated content illegally.

Services like Netflix and Amazon’s Prime Instant Video, meanwhile, have usually had to wait until a show goes off the air before hosting any new video content. CBS has been particularly conservative in this regard, keeping access to its shows as exclusive as possible for as long as possible even for Hulu (and even then, only making its shows available to users willing to pay for a premium Hulu Plus membership). CBS said that the literary connection for “Under the Dome” helped ease the negotiation process since the company felt that Amazon’s history as a book retailer would help attract more Stephen King fans as potential viewers.

“Amazon has the distinct combination of having a terrific video service with a huge fan base among their customers for Stephen King’s book, making them the perfect partner for this summer programming event,” Scott Koondel, chief corporate content licensing officer at CBS, said in a statement. “With this innovative agreement, we’re giving fans more options to watch and stay current with this serialized series, and doing so in a way that protects the Television Network’s C3 advertising window.”

Books may be what got Amazon where it is today, but the e-commerce giant is looking to television for its future. Earlier this month, the company confirmed a similar exclusive deal with PBS to stream seasons of the network’s popular period drama “Downton Abbey.” And it’s also commissioning first-party video content much like Netflix recently did with its new TV-style series “House of Cards.”

It’s too early to say if Amazon (or Hulu, or Netflix, for that matter) will prove a longstanding threat to existing cable networks or force any upheavals in the television industry’s current business model. But starting with the legion of “Downton Abbey” and Stephen King fans isn’t a bad place to start.

Amazon shares fell more than 1.5 perfect in Monday morning trading, falling to $257.22 per share shortly before noon.  

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