breakdown of amazon prime versus netflix for video streaming.

By February 23, 2011Technology

what greeted me on amazon.com this morning.

so, now it’s official: amazon will try to bite off a chunk of the streaming video market held by netflix. yesterday, amazon  launched their instant streaming service as a free part of their amazon prime service.

for those of you out there that don’t know about amazon prime, it’s a $79.99 a year upgrade to amazon that gives users 2-day shipping on any orders fulfilled by amazon. a while back amazon gave this away for free to college sudents and as i have an .edu address i have been enjoying amazon and definelty noticed a huge uptick in my orders from the site. however, these free student accounts won’t be able to take advantage of the new streaming service.

currently, they are offering 5,000 movies and tv shows through this new streaming service. following is a break breakdown of amazon versus netflix steaming.

1) (potential) audience.

amazon is by far the largest online retailer in the world -this means that they may actually have the potential to capture an audience for this service. amazon prime is actually a service for frequent shoppers to enjoy faster shipping, so streaming movies and tv shows are just an added bonus right now.

2) availability

the main shortcoming for the amazon service right now is it’s availibility, but i do not doubt that they can try to make up for it by offering the service everywhere soon. still, netflix is available everywhere you look…everywhere. on home computers, the iPad, the iPhone, iPod Touch, apple tv, build-in on certain tvs, blu-ray players, playstation 3, xbox 360 and all kinds of other set-top boxes. netflix took a page from the microsoft playbook here: make the software available to just about everyone under the sun and charge people for using it. however, i see amazon having great potential if they can reach android before netflix does.

3) switching.

as we all know human beings are creatures of habit. because we tend to enjoy what’s familiar and safe. many of us already use netflix streaming, and don’t subscribe to amazon prime. most people are happy with how netflix works: it can be accessed form anywhere, the selection is great and constantly getting better. so, there is really no reason to switch or to pay an additional yearly fee for amazon’s service. the classic “why is your service better?” question will be one that amzon will need to answer for potential customers. as of right now the truth is that with 5,000 movies and tv shows, it’s not anywhere close to what netflix offers…yet.

4) reliability.

Iti’ve never had anyissues with netflix, whether it’s their streaming service or sending and receiving discs: like a mac it just works. while i’m not saying that amazon’s service is unreliable, i’m just reiterating the fact that users will stick to what works for them. noone really has a reason to leave netflix if it’s not causing problems. this is of couse in contrast to the way at&t users wanted to head for the verizon iPhone, because they were unhappy with their service.

5) amazon streaming cost less than netflix

this is the main competitive advantage that amazon has at this point. their service averages out to $6.64 a month, which is less than the netflix $7.99 streaming only plan. this many make it appealing to customers.

the best streaming service

right now, netflix is my favorite streaming service. still, i love to see competition and what others may have to offer. on a side note to illustrate how switiching can happen even with the most die hard consumers: last week i sold my ps3 and bought an xbox 360. why? well, that my friends is a different story…

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