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Amazon Steps Up Battle With Netflix

Amazon Steps Up Battle With Netflix

Amazon Prime is making strikes on the video streaming leader

October 14th, 2012 by Mark Huffman of ConsumerAffairs in News

Netflix, which helped seal the doom of your neighborhood video store just a few years ago, now has Amazon nipping at its heels. Will it go the way of Hollywood Video?

Probably not, but industry insiders say the next few months will be very interesting. Wall Street doesn't know which way to turn, as Netflix stock has become volatile of late.

Netflix, which suffered a public relations disaster in 2011 when it split off its streaming and DVD rental services, is still the leader. It has some 27 million customers and has made some nimble moves when encountering adversity.

Shifting strategy

When Starz Entertainment refused to renew its contract with Netflix, the company found itself without access to some of the blockbuster movies its members expected. While there was some initial grumbling Netflix has loaded up on popular television and cable series, such as "Mad Men," "Louie," and "Breaking Bad."

Instead of just watching a movie, viewers found they could sit down and in one very long night watch an entire season of a TV series, commercial-free.

But while Netflix is expanding its movie library with a deal with Paramount's Epix, its emerging rival,, has also secured a deal with Epix for its Amazon Prime service.

What Prime offers

Amazon Prime may eventually prove a major threat to Netflix as it adds content. While Netflix is all about video content, an Amazon Prime membership gives consumers more.

First, members get free two-day shipping when they order products from Amazon -- well, most of the time anyway. They also get instant access to streaming video content from Amazon's video library Third, they can download a large amount of content to their Kindles at no charge.

Where Netflix costs $8 a month, Amazon Prime is $79 a year. Broken down to a monthly rate, however, it's $6.58.

Advantage, Netflix

So why not switch to Amazon Prime? There are still a few issues to consider. Amazon does not have as large a library as Netflix, through recent history has shown things like that can charge very quickly.

You can watch content from both services in a variety of places but Netflix currently has more places where you can watch, including TiVo, Apple TV, iPhone, Nintendo Wii, Android phones and tablets, Nook color tablets, and Windows phones.

Most movies on Netflix now have subtitles while Amazon has yet to take that step. Still, Forbes recently called Amazon Netflix's worst nightmare. It notes that with Netflix losing exclusivity for much of its content, the video streaming landscape could change in a hurry.

Despite the chaos in the business world that may cause, the result for consumers is likely to be more choices and lower prices.