Fresh off the news that Google is expanding their YouTube pay-per-view video rental service, Amazon appears ready to say that they’ve had enough with the pay-per-view structure. Instead, there are reports that Amazon is going to offer a Netflix style unlimited streaming plan, possibly bundled with their existing Prime membership.
Unlimited video streaming to be bundled with Amazon Prime
Rather than offering a brand-new subscription service, the most likely angle it appears Amazon will take is to bundle the video streaming service in with their Amazon Prime membership program. For those unfamiliar with Prime, paying a flat fee per year (current $79) allows the customer to get any item sold directly by Amazon or certain Amazon-fulfillment merchants shipped 2-day air for free or 1-day air for $3.99 an item.
Frequent shoppers from Amazon easily make up the difference in a year, and bundling the video subscription in with Amazon Prime only adds value. The main concern is that this would limit the subscription’s appeal to customers who don’t do a lot of shopping with the Internet retail giant. It is entirely possible that they will offer the subscription both as a separate cost item and as a bundle with Prime membership.
The new service is definitely aimed to compete with Netflix rather than Google’s planned streaming expansion. According to the Wall Street Journal, “Amazon appears to be targeting a similar model to Netflix, focusing on older, "catalogue" content, according to people briefed on the meetings.” Negotiations are reportedly ongoing, though both Amazon and the major studios have declined to comment. The service is aiming to be in place by the holiday 2010 season.
Also similar to Netflix, the service would be viewable on PCs, certain Blu-ray players, set-top boxes like the Roku, and the home gaming consoles—starting with the Xbox 360 and possibly expanding further. Services such as Netflix have normally started on the 360 first because Microsoft’s premium Gold-level subscription service has given them the funds to bring content providers to their platform before the other systems.
Though Amazon started its business as a physical goods retailer, this would only be the latest strategy in its ongoing expansion into digital products. While they will still likely offer video content through a pay-per-view model, Amazon led the push to offer DRM-free MP3 downloads after many Apple users were frustrated with the restrictions placed on their iTunes downloads.
When it comes to digital content, Amazon is perhaps best known for its Kindle e-reader device and the Kindle marketplace app available on many other devices. It’s clear that Amazon had a track record for success, so depending on the details of pricing and what content is available through the service, this could be another major headache for Netflix in offering.
Stay tuned as details emerge.
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