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Amazon.com Inc. (AMZN - Analyst Report) announced a content licensing agreement with CBS Television Network (CBS - Analyst Report), extending the archive of television shows and films currently available on its streaming video site, Amazon Prime Instant Video.

Amazon Instant Video is a digital video streaming and download service that lets users rent, buy or subscribe to a range of video content.

The CBS deal will make Amazon's Prime Instant Video service the exclusive online subscription service for streaming a new drama "Under the Dome," based on Stephen King’s acclaimed novel of the same name. The new episodes will be available on Prime Instant Video just four days after the series makes its debut on TV in June.

The online retailer has been consistently upgrading and promoting movies and television shows on its streaming video service. Over the past 12 months, Amazon has entered into a number of deals with every major Hollywood studio, as well as some of the major cable networks.

Recently, Amazon signed a deal with PBS Distribution and TNT for the exclusive web rights to famous series like "Downton Abbey" and "Falling Skies," which took the number of videos it offers to a total of 36,000.

We believe the deal is the latest effort by Amazon to strengthen its position versus Netflix (NFLX - Analyst Report), the leading online video subscription service in the United States. Additionally, Amazon has plans to produce test episodes of six comedies and five children’s series this year, while Netflix has four more original series coming up this year.

Amazon is spending a considerable amount on licensing deals for movies and TV shows to attract more viewers to Prime Instant Video. Though these deals are helping to build a library of television shows and movies, it is still well behind rival Netflix. Netflix’s Internet video library is estimated to have more than 75,000 titles, still far more than Amazon's service.

Amazon is one of the leading players in an extremely fast-growing market. In the fourth quarter, Amazon’s revenues of $21.3 billion were up sequentially as well as from the year-ago quarter. Management attributed the increase in revenues to the growing consumption of digital content across different categories owing to the advantageous value proposition Amazon was able to provide to its customers.

Amazon shares currently retain a Zacks Rank #3 (Hold) while Netflix carries a Zacks Rank #2 (Buy). Others stocks that are currently doing well include Autodesk Inc. (ADSK - Analyst Report) and TiVo Inc. (TIVO - Analyst Report), both of which carry a Zacks Rank #2 (Buy).

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