Amazon (s AMZN) has finally unveiled its Prime Instant Videos, making more than 5,000 movie and TV titles available for unlimited streaming as part of its Amazon Prime free shipping service. Priced at $79 a year, the offer is basically the same plan that leaked to the press earlier this year.
But with the official launch of a new streaming service introduced by deep-pocketed Amazon, what will this mean for Netflix, which has a low-cost streaming subscription service of its own? Probably not much, for a couple of reasons.
It’s Not That Good of a Value
Some will compare Amazon’s pricing at $79 a year (or about $6.50 a month) to Netflix’s monthly streaming subscription pricing, which is currently $7.99 a month or about
$86 $96 a year. And while Amazon’s pricing is generally somewhat cheaper — and comes with the added bonus of free, two-day shipping — the service has only 5,000 titles, just a quarter of the 20,000 movies and TV shows that Netflix boasts as part of its streaming service. Plus, many of those titles — include the Stieg Larson Millennium Trilogy movies, documentaries like Man On Wire and Food Inc. and classics like One Flew Over the Cuckoo’s Nest — are also available to Netflix subscribers. In other words, don’t expect Netflix junkies to jump ship just to save a few bucks a year.
Amazon Isn’t Everywhere — Yet
Amazon Prime Instant videos is launching on (almost) all the same connected devices its video-on-demand service is already on, which include Google TV (s GOOG) products from Sony (s SNE) and Logitech, (s LOGI) connected devices from Panasonic, Samsung and Vizio, as wells as Roku broadband set-top boxes. That’s not bad for a streaming service at launch, but it still pales in comparison to the number of connected devices Netflix streaming is available on. Amazon Prime also don’t have support for a number of mobile devices — like the iPad, iPhone and Windows Phone 7 — that Netflix is already on.
We’ve Seen This Movie Before
Netflix was first to market in the DVD-by-mail space, giving it a pretty wide lead over other rental stores. But when Blockbuster, then the leading video rental company on the market, introduced its DVD-by-mail service to go up against the upstart, many thought Netflix was toast. While we don’t expect Amazon to suffer the same fate as Blockbuster, we also think it’s unlikely that Amazon will be able to unseat Netflix as the #1 streaming subscription service anytime soon.
Prime Instant Videos — A Nice Feature, but Not a Netflix killer
We’ve said it before and we’ll say it again: The Prime Instant Video service will be a nice value-add for Amazon customers, and it will likely increase the number of sales in other departments. In some ways, Amazon is taking the opposite approach that Netflix is: While Netflix is offering streaming as a way to reduce its spending on postage and improve margins, Amazon seems to be using the Prime Instant Videos offering as an incentive to sign up for its free shipping and buy more stuff. But until we see Amazon’s streaming service get more video titles or land on more devices, we’re skeptical the service will cause a mass exodus of Netflix subs.
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