Monday, October 31, 2011

The Hunt for Red Netflix: Amazon Prime acquires ABC/Family Channel/Disney Channel content.

I guess Netflix has a nat buzzing around Reed Hastings head.  Once again Amazon Prime shows it means to stay in the hunt and make it’s own dent in the instant streaming market.  Another announcement, and you have to wonder when Netflix will begin acknowledging the competition.

Let’s be real, here.  There has been no real threat to the Netflix streaming business model before.  Yes, there were competitors, but not one understood the power of pay one price for a buffet smorgasbord of programming.  But Amazon seems to get it.  The question is how deep will they go before they raise the price?

As more people try Amazon Prime and become accustomed to the benefits, something may have to go.  I’m not sure even Amazon can absorb the high cost of free shipping and with programming for less than $4 a month.  Unless they make up for it in sales of other merchandise as people try Prime and grow to love it.

That may be what they are hoping for though.  If they are going to challenge Netflix, now would be the time as Netflix is attempting to conquer Europe.  But is Red Hastings moving too fast and spreading himself too thin in the process?  And will the cost of the European expansion for Netflix cause them to shortchange their North American subscribers? 

The biggest draw back to Amazon right now is that their User Interface on prime needs a lot of work.  There’s no sure way to even browse the movies, let alone make you a queue.  I think something along those lines would go a long way to solidify their growth.

Time will tell.  Here’s the announcement:

ABC Amazon content

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