Amazon started out as a basic e-commerce site where people could buy and sell their stuff online, like an online flee market,
however, Amazon soon expanded their horizons and became adventurist. They have since come out with a few different versions of the Kindle, and they have an online e-book store. Now they want to stream movies and TV shows. The e-commerce king of America has finally decided to compete with Netflix in a movie streaming and DVD rental service game that is bound to be big news soon.
For a while, Netflix was the only big dog in the online streaming market for movies and TV shows, however, Amazon is emerging as an intimidating adversary in the business. Right now, Amazon offers downloadable movies, but the customer needs to pay for each one individually. Amazon’s solution to this: offer over 5,000 movies as instantly watchable and at no extra cost with the purchase of Amazon’s Prime membership club. “By bundling it with Amazon Prime, Amazon would quickly scale up to about the same number of users that Netflix has in the U.S. for paid streaming,” says Marrianne Wolk, an analyst with Susquehanna Financial Group.
Amazon recently bought 58% of the British DVD rental firm, Lovefilm, giving Amazon a head start in the Europe home- movie front. This recent purchase by Amazon will seriously hinder Netflix’s plans for international expansion.
Amazon will not confirm these plans of online streaming service; however, analysts expect that the company will offer it shortly. It is also known that Amazon’s Prime membership package and streaming service priced at $79 will be about $15 cheaper than Netflix’s service. With the Prime membership service, customers receive unlimited 2 day shipping for books and other items; the instant online streaming is an added perk of the membership.
It is believed that Amazon will release this new perk for membership at the end of February 2011. This will no doubt increase the competition Netflix has right now, maybe even pressuring them into giving more benefits for their memberships. Good luck to both companies.
