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Amazon, Viacom reportedly near Web video deal

Amazon moves one step closer to launching a standalone, subscription-based video streaming service with news of a possible partnership with entertainment giant Viacom.

Amazon Instant Video Screenshot by CNET

Just over a week ago, industry sources revealed that Amazon might expand its current member-based instant video plan and launch a standalone, subscription-based video streaming service, much like Netflix's.

Today, Reuters reports that Amazon has moved one step closer toward launching this service and is on the verge of announcing a Web video deal with Viacom. The deal could be revealed this week, according to Reuters.

If the deal goes through, the partnership could stiffen competition with Netflix, which is being hit from all sides. Just this week, news broke that HBO is investing $10 million in Australia's Quickflix, and Verizon announced it was partnering with Redbox to offer a video streaming service.

Viacom owns several TV networks, including BET, MTV, VH1, Nickelodeon, Nick at Nite, COMEDY CENTRAL, Centric, CMT, Spike TV, TV Land, and Logo. It also owns a huge library of movies from Paramount Pictures, 160 TV networks in other countries, and digital media such as Neopets and Addicting Games.

According to Reuters, Viacom Chief Executive Philippe Dauman told Wall Street analysts last week that Viacom was planning to strike an online video deal this week; however, he would not name the partner.

Amazon has already partnered with several other companies for its Prime Instant Video service, which is included in its $79-a-year Amazon Prime membership. These companies include CBS, Warner Bros, Fox, Sony, NBC Universal, and Walt Disney.

There are predictions that Amazon's Prime Instant Video service will soon become available for non-Prime members. Even Netflix is preparing for this. In a letter sent to shareholders at the end of January, Netflix wrote, "we expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours."

Increasing what's available on Amazon's streaming video could only boost Kindle use and sales. Amazon's fourth-quarter sales for the Kindle tripled over the holidays, and, according to Reuters, Amazon's Prime Instant Video streams also rose nearly 300 percent in the fourth quarter.

Amazon did not return request for comment.