Amazon Set to Rival Netflix with Online Movie Service


Amazon will soon become a serious competitor to Netflix’s online movie rental service. Sources suggest that the world’s biggest online retailer is in discussions with a number of movie studios about acquiring content for setting up an online movie streaming service similar to Netflix. Sources added that is yet to conclude negotiations with big Hollywood studios even as it has already acquired rights for a number of independent movies.

Initially, Amazon was looking at a mid-February release for the service but the date was postponed by the company in order to rectify technical problems and acquire additional movie rights. As of today, there is no clarity on when the service will actually be released.

Hollywood studio executives have said that they expect Amazon to match the price paid by Netflix for movie content as a prerequisite for the deal to go through. Before taking a final decision, studio executives will also consider the potential impact of any such deal on DVD sales and pay per view deals with cable companies.

Another major player that is set to challenge Netflix is online TV distributor Hulu. Hulu is in talks with movie studios to acquire content for its Hulu Plus subscription service. The move seems to have been prompted by Netflix’s inclusion of television content in its online subscriber service.

Netflix is the undisputed leader in the online movie streaming service segment. The company added 7.7 million subscribers in 2010 alone, taking the total number of subscribers to 20 million. The markets have rewarded the company’s superlative performance and Netflix stock has trebled in the last financial year.

Unlike Netflix, Amazon and Hulu are targeting older movies that have been released over seven years ago and have seen a full run on cable networks like HBO, Epix and Starz. In addition to older movie titles, Netflix also offers its subscribers movies that have been released recently and are currently airing on cable TV; a relatively expensive proposition.

Amazon has revealed that the company’s online movie streaming service will be part of its premium Amazon Prime membership program. Customers who sign up for a year of unlimited shipping by paying $79 a year will also get free access to Amazon’s streaming movie content. While the cheapest Netflix plan costs $95.88 annually, Netflix subscribers will enjoy access to a much wider collection of streaming content.

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