Internet retailer Amazon.com Inc. (NASDAQ: AMZN) has announced that it plans to expand its offerings of original programming to include comedy shows and kids programming, in addition to its existing 15 shows in development at the company’s Amazon Studios. Netflix Inc. (NASDAQ: NFLX) is also developing an original series that will star Kevin Spacey.

But both Amazon and Netflix face pretty tough competition from the likes of Walt Disney Co. (NYSE: DIS), Time Warner Inc. (NYSE: TWX) and its HBO network, CBS Corp. (NYSE: CBS) and its Showtime channel, and Viacom Inc. (NASDAQ: VIAB) and its Nickelodeon network, among others.

In its announcement today, Amazon said it will option one new project a month to add to its development list and to test with an audience. If the company picks up the option, the creator will receive a payment of $55,000 plus a share of merchandise licensing, royalties, and bonuses.

Like Netflix, Amazon’s streaming video offering needs a constant stream of good quality content. Licensing that content from the existing studios is getting more expensive as the studios get the idea that they can do it just as well or better, and keep more of the money.

Back in the early days of the World Wide Web, the mantra was, “Content is king.” But that content was generally static. Today’s streaming video and live Internet programming were a distant dream. But content is still king. The issue is whether that content can be licensed or created at a reasonable cost.

Amazon and Netflix are fighting an uphill battle here, and, as in all uphill battles, the odds favor the folks on the high ground.

Paul Ausick

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