Bloomberg News

Amazon Prime Extends Netflix Competition to PlayStation 3

April 03, 2012

PS3 games consoles. Photographer: Franck Fife/AFP/Getty Images

PS3 games consoles. Photographer: Franck Fife/AFP/Getty Images

Online retailer Amazon.com Inc. (AMZN:US) added its streaming films and TV shows to Sony Corp. (6758)’s PlayStation 3 console, playing catch-up with rival Netflix Inc. (NFLX:US)

The PS3 is the first game device to get Amazon Instant Video film and TV rentals, Bill Carr, the Seattle-based company’s vice president of video and music, said today in an interview. The service is already available on televisions, Blu- ray players, TiVo Inc. (TIVO:US) and Roku set-top boxes, he said.

The deal also includes Amazon Prime, a $79-a-year two-day shipping service that provides 17,000 television shows and older movies at no extra charge. Amazon Prime will join Tokyo-based Sony’s PlayStation Network, giving customers access through the PS3, which has sold about 20 million units in the U.S. through February, according to Sony.

“A lot of our customers have been asking us to make our services available on the PlayStation 3 for a long time,” Carr said. “It’s all about building the best digital video service available.”

Amazon is chasing Netflix, which has 21.7 million U.S. streaming viewers paying $7.99 a month and is on devices including the PS3, Microsoft Corp. (MSFT:US)’s Xbox and Nintendo Co. (7974)’s Wii. Carr wouldn’t say whether Amazon Prime was coming to the Xbox, the top-selling video-game console for the past two years.

Amazon Prime has 3 million to 5 million subscribers, people with knowledge of the matter said in February.

Exclusive Shows

Netflix, based in Los Gatos, California, offers more than 20,000 film and TV titles. The company has been trying to distance itself from competitors by adding exclusive content, including the recently released “Lilyhammer,” “House of Cards,” scheduled late this year, and new episodes of cult television favorite “Arrested Development.”

Amazon rose 0.8 percent to $199.66 at the close today in New York, and has added 15 percent this year. Netflix lost 0.9 percent to $112.96 and is up 63 percent so far in 2011.

The relatively late move onto video consoles may mean Amazon’s costs are higher to secure new customers, Anthony DiClemente, an analyst with Barclays Capital in New York, said in an interview.

“They’re not a first mover, so the product has to be very solid,” DiClemente said. “That means they need to make the right content investments and perhaps spend a little more than a first mover might have to spend.”

DiClemente lowered his rating on Netflix to “equal weight” today from “overweight,” citing increased competition and rising content costs.

Amazon’s U.K. business, Lovefilm, offers streaming titles on the Xbox 360 and Apple Inc. (AAPL:US)’s iPad, Carr said. A software maker Amazon acquired last year called Pushbutton created the applications for the PlayStation and Xbox services, he said.

To contact the reporters on this story: Cliff Edwards in San Francisco at cedwards28@bloomberg.net; Danielle Kucera in San Francisco at dkucera6@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net; Tom Giles at tgiles5@bloomberg.net


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Companies Mentioned

  • AMZN
    (Amazon.com Inc)
    • $327.76 USD
    • 3.87
    • 1.18%
  • NFLX
    (Netflix Inc)
    • $456.91 USD
    • -0.84
    • -0.18%
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