UPDATED 06:37 EDT / JULY 23 2013

Online Video Titans Netflix + Amazon Q2 Earnings : Battle for Premium Content

Hit TV shows are generating big bucks for online streaming companies. Analysts believe that the success of Arrested Developments and other programs helped Netflix grow its revenue by 20 percent last quarter, a massive jump that underlines the company’s solid performance in 2013.

Netflix chief executive Reed Hastings is set to report his company’s second quarter earnings later today. The Street expects 40 cents a share on sales of $1.07 billion, up from 11 cents a share on sales of $889 million but “roughly flat” with the $1.02 billion Netflix earned in the first quarter of this year.

Mark Mahaney of RBC Capital Markets advised clients to pay special attention to the company’s subscription numbers, which he estimates rose 7.4 percent to 39 million. Lazard Capital Markets analyst Barton Crockett expressed a similar view and said that Netflix likely downplayed the rise in subscribers accounted for by original content such as the critically and commercially acclaimed “House of Cards.” Last Thursday, the show became the first online series to receive an Emmy nomination.

Amazon, another prominent streaming service provider that’s set to report its earnings this week, is also bolstering its content library in an effort to attract consumers. The company recently signed a deal with Miramax to make “Pulp Fiction,” “The English Patient,” “Good Will Hunting,” “Life Is Beautiful,” and other popular titles available via its Prime Instant Video service.

Amazon will hold its second quarter earnings call on Thursday. The company is expected to report a profit of $0.06 on revenue of $15.74 billion, a noticeable increase over the $0.01 EPS and $12.83 billion it earned in the same period last year.


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