Dec. 7, 2010 at 1:36 PM ET
Amazon might come out swinging with a subscription-based streaming video service that would cost less than Netflix (based on 12 months of service) and be bundled with its Amazon Prime shipping service, according to the Wall Street Journal.
Prime, which provides free 2-day shipping, costs $79 per year. Netflix's least expensive subscription tier with unlimited streaming video costs about $96 for the same duration.
UPDATE: Amazon spokesperson Cat Griffin told us, "We have not announced anything about a subscription-based, streaming video option."
Netflix's success in making a seemingly-seamless integration of streaming-only subscriptions into its DVD-delivery service makes it the reigning champ, but contenders are stepping up into the arena. Besides Amazon, Hulu is another video provider that streams unlimited content for $7.99 per month.
Amazon already offers Video on Demand, but it's a la carte, not as appealing to our gluttonous natures as Netflix's buffet style approach.
Since Amazon already charges 99 cents for shows from NBC, FX, AMC, Fox and other networks, they would presumably have a license to much of the same stuff, but for the subscription fee. Amazon, as well as iTunes, already offers season subscriptions for TV shows.
Also, from the Journal:
In August, Netflix agreed to pay about $1 billion over five years to Epix, a pay-TV channel owned by Viacom Inc., Lions Gate Entertainment Corp. and Metro-Goldwyn-Mayer Studios Inc., for Internet rights to films and TV shows.
With 16.9 million subscribers at the end of September — up 52% from a year earlier — Netflix is the red giant that slew Blockbuster and put fear into the hearts of cable, satellite and other paid TV services. The Journal reports that they lost subscriptions for the first time since "the dawn of cable": about 335,000 U.S. households out of about 100 million, according to data provider SNL Kagan. It's still a drop in the bucket of our TV-obsessed country, but it's a turning point.
And as for DVDs, in its third quarter 2010 financial summary, Netflix surmises that in the current quarter, "A majority of Netflix subscribers will watch more content streamed from Netflix than delivered on DVD." (I'm a Netflix early adopter, receiving the red envelopes since 2000.)
Meanwhile, ReadWriteWeb made a curious observation about Amazon's plans, if it does come to pass:
It's interesting that Amazon would focus so much on the form of content delivery and package it together with traditional shipping. Will Amazon users really have to continue paying à la carte for most content and only get a Netflix-type option if they subscribe to a service meant for traditional shipping fees?
And how about customers who are already Amazon Prime members (like me)? Will we get the streaming subscription automatically added? Do we have to ask for it?
And if you're a loyal Netflix customer, what would it take for you to dump it and go to a rival service?