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Summary:

Yesterday we learned that Amazon will launch a pay-per-view streaming service in the next few weeks. Since then, Silicon Alley Insider was able to extract a few more nuggets about the service from Jeff Bezos: You’ll be able to stream rentals and purchases, prices will be […]

Yesterday we learned that Amazon will launch a pay-per-view streaming service in the next few weeks. Since then, Silicon Alley Insider was able to extract a few more nuggets about the service from Jeff Bezos: You’ll be able to stream rentals and purchases, prices will be the same as Unbox, and you’ll be able to watch movies right away.

But what does it all mean? Is it a good idea for Amazon? Amazon PR is being incredibly tight-lipped about the whole thing, but here are some initial thoughts.

Since the service will stream, you’ll have to watch it on your PC (Unbox movies are currently Windows-only). That is, unless Amazon’s planning to turn the Kindle into a set-top box, which would just stream the scripts for all the movies.

Consumers are used to paying nothing for streaming; the ad-supported model has helped make Hulu a hit. So will people cough up $3.99 to stream a movie? That seems like a stretch. At least the Roku hides the “fee” by charging you $99 for the box and making it part of your regular Netflix subscription.

Streaming also presents a technical issue inside the home should someone else in the house hop online and start gobbling up bandwidth. I’m fine with buffering and pauses when the content is free, but if I’m paying to watch a movie, my tolerance level for interruptions would be pretty low.

On the plus side, depending on what it negotiates with the networks and studios, Amazon could offer a library of content much bigger than Hulu, with more movies and TV content from the likes of CBS. But I don’t know if that will be enough to persuade people to fork over for the privilege of instant watching. A full-length movie isn’t something I usually decide to watch spur of the moment, and typically not something I’d want to watch on a smaller PC screen. TV shows are better-suited for instant gratification, but with so many free options available, why pay $1.99?

But it’s not just the Hulus of the world with which Amazon is competing. iTunes doesn’t offer streaming, but you can watch videos as they are downloading. I can’t imagine that slight time difference actually making a difference. VOD through cable won’t offer as much content, but it’s immediate and on the big screen.

As we noted earlier, there are still a lot of questions. What type of streaming technology will be used? Will it require a plug-in? Will there be HD?

During Amazon’s last earnings call, Bezos barely touched on his company’s digital initiatives, other than to say that he was “extremely happy” with them. Even studios admit that the digital movie downloads aren’t gangbusters right now. But will streaming be the way for Amazon to kick-start the business? That’s the real question to be answered.

  1. It’s about time someone is stepping in to grab the streaming movie business by the horns and run. I haven’t tried Netflix but then again prior to their new box they weren’t really pushing this option (and I’d prefer to pay-as-I-go rather than commit to a monthly charge). I don’t care for Cinema Now either because (for reasons I don’t understand) they insist on downloading the entire movie onto your disk. So listen up Amazon, here’s the key to success:
    1. no proprietary player download
    2. no set-top box
    3. no monthly fees
    4. no downloads, streaming only please
    Good luck!

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