Hey Netflix, Don't Let Amazon "Blockbuster" You

By Damian Thompson Is history repeating itself? It's seems like only yesterday we were lamenting “If the rise and fall of Blockbuster has taught us one thing, it's "evolve or fall by the wayside." Lo and behold after vanquishing the Blockbuster beast, Netflix (NFLX) has a new gladiator in the arena. Amazon (AMZN) has launched a new video streaming service that's at no additional cost to US Amazon Prime members.

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Is That Some Sort of “Special” Rain Forest? What is Amazon Prime? Historically Prime subscribers paid $79 annually to get free shipping and two-business-day delivery on purchases. With the new perk subscribers will now also be able to watch more than 5,000 movies and TV shows online. “Millions of Amazon Prime members already enjoy the convenience of free Two-Day Shipping. 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 for their $79 annual Amazon Prime membership.” according to Robbie Schwietzer, Vice President of Amazon Prime.

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New Tricks for an Old Dog Can't I already stream videos from Amazon? Not exactly. Amazon's existing Instant Video catalog sells downloads on a per-title basis, not streaming, and it has received little recognition in the marketplace. This seems Amazon's way of rectifying this, as well as nudging customers to also think of them as an entertainment company, rather than "just" an e-commerce site. Both Netflix and Amazon's service is available on Mac, PC, Roku, TiVo, Logitech Revue and a variety of Internet-connected TV and Blu-ray players. According to Cameron Janes, Amazon's director of Instant Video, Amazon is “just getting started,” and it's looking to “grow the selection” of movies and TV shows over time. He also says instant streaming will, “introduce more customers to Amazon video in general.”

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Amazon says it hopes the new service will bolster both its digital business and retail business. It will also increase the value of a Prime membership which is a great loyalty tool for the company. Why buy a book, dvd, or lamp from some other online retailer when you get fast free shipping from Amazon? Not Equals in Battle -- Yet The 5,000 titles Amazon offers are only a fraction of the content available to Netflix subscribers. As of yesterday's signing with CBS (CBS), Netflix has deals with every major film studio and a number of TV studios -- the only streaming provider to do so. But according to Amazon it's in talks with every Hollywood studio and is said by "people familiar with the matter" to be seeking to grow its content selection with more and newer content. Amazon is also a likely candidate to be DVD kiosk rental company Redbox's (CSTR) as-yet-unnamed partner.

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