SEATTLE: Amazon has improved the offering to its Amazon Prime customers by striking a deal with CBS, the US entertainment group.

The world's largest online retailer's partnership with CBS will give Amazon Prime viewers, who pay a $79 annual membership fee, the opportunity to watch over 8,000 TV programmes and films at no additional cost, Bloomberg reports.

This move is likely to intensify competition with Netflix and Hulu.

In February this year Amazon officially launched its instant streaming service, giving Amazon Prime subscribers unlimited access to the Amazon library. In the same month Netflix and CBS announced a non-exclusive, two year streaming content licensing agreement.

Later this year, CBS content will also be added to Amazon Instant Video, the streaming service that offers customers the chance to buy or rent over 90,000 movies and TV shows.

While Apple continues to capitalise in the new-release arena, Amazon's move into mainstream content streaming puts the online retail operator into direct competition with Netflix.

Hulu is the other online video player likely to be affected by the Amazon CBS arrangement.

Speaking to Bloomberg, James Corwell, analyst at Atlantic Equities, said: "This agreement could diminish the likelihood of Amazon being a buyer of Hulu since it's going down its own path and doing separate deals with content vendors."

It is understood that Amazon is preparing a showcase for its video streaming services in the form of a nine-inch Android tablet. 

Content deals are seen to be an important means of competing with the iPad's significantly wider catalogue and app varieties.

Data sourced from Bloomberg, Electronista and Techcrunch; additional content by Warc staff