- Price Included with Popular Shipping Service
- Already Comes to Roku, Google TV
- Netflix, Hulu Might Take Notice
Amazon has rolled out a streaming TV and film service for its Amazon Prime members in the US, hoping to take Netflix and Hulu Plus users to the mat. The service comes in at $79, beating both Hulu and Netflix out at their cheapest of $95.88, and includes the other benefit of Amazon Prime: free two-day shipping on all Amazon.com orders.
Amazon said the service is available on Macs, PCs and nearly 200 models of Internet-connected and smart devices. Shortly after the announcement, Roku and Google TV both came out saying they supported the content. It appears that TVs and STBs with an Amazon VoD app pre-installed are getting updates to accommodate the new service, but a full rollout schedule was not announced.
According to Amazon, the service offers 5,000 movies and TV shows — there are a little over 2,100 different titles and shows, so the 5,000 number is likely counting TV show episodes as well. Some of the content Amazon will stream includes “The Girl with the Dragon Tattoo,” “Doctor Who” and “Farscape.”
Amazon signed up two major studios, Sony Pictures and Warner Bros, to provide older movies from their libraries and 13 independent studios including the BBC, PBS, Magnolia Pictures, IFCNational Geographic. and
Dan Rayburn, an analyst covering Web video for consulting firm Frost & Sullivan, was the first to nail it, predicting the service more than three weeks ago.
“Millions of Amazon Prime members already enjoy the convenience of free two-day shipping,” said Robbie Schwietzer, VP of Amazon Prime. “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.”
Amazon’s biggest competitors in the space are Netflix and Hulu Plus, and each of the three shine in different ways when looking at the market:
Looking at Amazon and its competition, a lot of the service’s success rests on pushing the shipping offering to users while also figuring out how to acquire new content for its streaming options.
Studios have oft complained of Netflix’ lackluster revenue streams (in their perspective), something which Amazon’s service could easily be accused of as it is cheaper and comes with the shipping side. Amazon does have a slight advantage in that its relationship with studios is more than a decade old, looking back to Amazon’s large DVD days.
Amazon said it is in talks with all major studios and producers to obtain more content, and was quick to note that it already offers more than 90,000 movies and TV shows for rental or purchase.
Verdict: Mediocre Now, Lots of Potential
MediaPost’s Steve Smith might have put it best: “the one thing Amazon, the world’s leading e-retailer, needs is a better online shopping experience.”
Amazon Prime shows how tough it can be to showcase downloadable content. And, pardon the pun, it’s a prime example of how even a company great at selling physical media must figure out a new and different approach to selling digital media.
On the big screen, Amazon Prime makes it tough for users to look for what they want. Open up a TV show’s page and you’ll get a listing of that show’s seasons, each displaying the DVD case or appropriate image that the user must click on to proceed through. The problem here is that among the wall of DVD cases are mixed in various other related shows, sometimes appearing in the list before less-popular seasons of the TV show you’re looking for.
The layout is similar to Amazon’s existing music and video layout, which has often been a bit cumbersome and difficult to navigate. Putting that on the big screen, and given the limits of some remote controls, navigation gets downright user unfriendly.
The streams we were seeing varied across devices as well. Using a Google TV box, we peaked at 480p though some streams coming from Roku and on the PC appeared to be closer to 720p.
Amazon needs to design a new UI for the feature for it to really catch on. Amazon should look to Hulu Plus for UI tips and to see how frustrating varying content can be to consumers.
Netflix’ Counterpunch
Hot on Amazon’s announcement, Netflix made it clear it is still the king of the stream.
Netflix announced a new streaming deal with CBS just hours after Amazon took the wraps off its streaming feature. Its new two-year deal gives Netflix episodes from classic CBS shows like “Star Trek,” “Frasier,” “Cheers,” “Twin Peaks” and “The Twilight Zone.” It also gets select episodes from current shows like “Medium” and “Flashpoint.”
The CBS deal it had covering shows like “NCIS,” “CSI” and “Numbers” has expired and these shows may not make it back to the service.
CBS seems to have continued its snub of Hulu, not extending any similar deal that way. Hulu has scored some recent victories including rights to stream Criterion Collection films — Netflix just lost streaming rights to many in this collection — and it’s making amends with Viacom for “The Daily Show” and “The Colbert Report.” Beyond those two deals, however, Hulu has been pretty mum on new content since last summer.
Europe is the Big Play Market
With a somewhat limited offering, especially when taking on Hulu or Netflix, some are finding it hard to take Amazon seriously as a streaming contender, but there’s a big chance this is just the foundation.
Looking at Amazon’s European market can show if the future of this service is all about streaming.
Amazon owns LoveFilm and already has 1.6 million streaming video customers through that company in the UK. Amazon is also said to be looking into purchasing equivalents in the rest of Europe, with a German acquisition leading the rumor mill followed closely by a French purchase.
Amazon launched its shipping service in Germany and the UK in 2007 and in France in 2008 under the name Amazon Premium. These present a great way to get into the market, and extending LoveFilm to its streaming offering associated with the Prime/Premium service would make Amazon a big player in the streaming world.
Amazon doesn’t have to take on Netflix or Hulu on their home turf — it can go after the markets they want to be in but have yet to find a way into.
Touch and Tease the Future
Amazon needs two things to really kick off this service in a major way: 1) a big expansion of its Disc+ On Demand service; and 2) tablets and other devices. Yes, everyone has a tablet these days, but one of the iPad’s largest advantages over its competition is a single click to get to the iTunes store and a single payment account from which users buy apps, music and video content. Few can take on Apple in terms of iTunes, but Amazon has the resources to do that immediately.
Amazon is one of the Web’s top destinations for DVDs and CDs, but Netflix and Apple are taking their toll on these industries, especially with Apple TV and the iPad integrating the iTunes store and cheap rentals.
Expanding its service to a tablet and building a new UI for that device — as well as including content sharing across devices — would put an Amazon-branded tablet in a place that no one else can. Amazon doesn’t even have to develop it; it only has to do a massive integration on one tablet — RIM’s PlayBook would likely be a very willing partner since the device is the only one to run the QNX-based OS.
Amazon has a strong following and may be able to hold off these invaders — it counts 65 million total visitors coming to its main site each month, a few million of which are Prime members. Amazon customers are willing to spend money, hands down. Amazon knows that and could use it as some major leverage.
Imagine a deal between Amazon and Roku where Amazon eats the cost of the STB and gives it out to Amazon Prime members. Amazon then presents these users with its streaming service and a selection of 5,000 free titles while also suggesting other titles for users to rent or purchase.
Amazon’s Disc+ On Demand service needs to play a major role in the future of this content. Disc+ On Demand gives the user a digital copy of some physical media they buy. Users can stream digital versions of select DVD and Blu-ray titles once they purchase the disc — streaming is activated once the payment is processed, allowing the user to watch content even sometimes before it is shipped.
Imagine integrating Disc+ On Demand with Prime in terms of teasing multiple seasons of TV shows. Buy season 2 of “The X-Files” or “Doctor Who” and get free shipping with your Prime membership, why shouldn’t Amazon let you stream it and season one? Or why not give users access to the first three episodes of season three, encouraging a purchase of that DVD/Blu-ray pack as well?
If users make these physical purchases, why not extend their content and associated teasers to all of their connected devices?
The content shortfalls for Amazon Prime are likely just an issue with it being a new service, not a permanent problem, leaving only the UI as a major hurdle. Integrating consumer purchases could make this one of the best promotional tools around, and if Amazon uses it to sell more content by giving away snippets here and there, why would it ever concern itself with Netflix or Hulu?
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