Photo of a netflix mailer.
Will Amazon be able to compete with Netflix? CC by jcestnik/Flickr

According to Amazon.com, the Amazon Prime free shipping service has been supercharged for the streaming video age, reports CNET. For $79 per year, not only will Amazon Prime customers get two-day shipping at no additional cost, they’ll have access to unlimited streaming video of movies and TV, much like Netflix. With a catalog of 5,000-plus movie and TV choices, Amazon Prime users can enjoy streaming video on a PC, Mac or Internet-enabled television. The $ 79 annual price for Amazon Prime undercuts the minimum Netflix price of $ 95 per year.

War between Netflix and Hulu interrupted by Amazon Prime

Dana Rayburn of consulting firm Frost & Sullivan told CNET that the Amazon Prime news comes as no surprise, considering the built-in audience of 65 million-plus and the operating capital necessary to get a streaming video venture rolling. Adding such value to an already popular free shipping service at no additional cost was a no-brainer, said Amazon Prime Vice President Robbie Schwietzer.

“Millions of Amazon Prime members already enjoy the convenience of free two-day shipping,” said Schwietzer. “Adding unlimited instant access to thousands of movies and TV shows at no additional cost is a great way to give members even more value.”

With the online streaming video market already taken over by Netflix, Hulu Plus and Apple TV, Amazon Prime will have a lot of competition. Amazon.com is a giant of its own when it comes to selling books, movies, music and more, plus its annual subscription fee beats Netflix and Hulu Plus. Amazon Prime won’t require that viewers watch commercials before or during the streaming videos like Hulu Plus does, reports New York Magazine. And Amazon.com has a great relationship with Hollywood studios because of DVD distribution. That means it shouldn’t be difficult to get the rights to streaming video.

Huge size of Netflix means more business

Netflix has more than 20,000 movies and TV shows for streaming already, which Amazon Prime won’t be able to compete with in the beginning. In order to compete well, Amazon Prime will have to grow quickly. In its defense, Prime will have popular films and TV shows like “The Girl with the Dragon Tattoo” and “Syriana,” along with shows like “Doctor Who” and “Farscape” right out of the gate. However, it is also likely that Amazon will have the same problem with broadband provider giants like Comcast that Netflix had.

Citations

CNET: http://news.cnet.com/8301-31001_3-20034714-261.html

New York Magazine: http://nymag.com/daily/intel/2011/02/phase_one_of_amazons_plan_to_d.html

Amazon Prime: A ‘massive shot’ at Netflix: http://youtube.com/watch?v=olG4zGDWPQg

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