is in the unique position of being able to transform its business model to stay current with the times. For example, with demand for DVDs giving way to streaming options, Amazon has decided to be aggressive with its Prime Instant Video service by offering cable network Epix
a deal it simply couldn't refuse.
Citing an "executive directly involved in the deal," Reuters
claims Amazon agreed to a performance-based bonus payment incentive, one in which Epix will receive additional funds if Instant Prime Video membership rises above a certain level. That bonus payment is on top of whatever fixed rate the two sides agreed to in the first place.
Just as important here is the fact that Amazon and Epix may have just changed the streaming landscape on the business side of things. Amazon's main rival, Netflix, has at times struggled to hammer out renegotiated streaming deals when existing contracts expired. It always comes down to a dispute over money, but perhaps subscriber-growth incentives will prove a mutually beneficial bargaining chip for all sides involved, maybe more so for media and cable companies seeking a larger chunk of the streaming pie.
As for Amazon, Epix chief Mark Greenberg says, "Internet delivery of content is a way in which a new, emerging younger audience wants to view content, and they know they can be a significant player in the space, we are happy to help them get there."
It's a savvy business move by Amazon. Prior to this deal, Netflix held exclusive rights to stream Epix content at a rate of $200 million per year. When that contract expired, Amazon jumped in and inked a three-year deal with Epix, netting the Prime Instant Video service 3,000 additional movies in the process.
Amazon Prime runs $79/year and includes free two-day shipping on millions of items with no minimum order size, unlimited instant streaming with Prime Instant Videos, and a Kindle book to borrow for free each month. If you're a student, the service is free for six months and $39/year thereafter, for up to four years.