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In April of last year, I wrote an article about the increasing choices one had with on demand viewing. At the time I said Amazon’s service, Amazon on Demand, offered a plethora of shows and really high quality viewing. I also said that the biggest problem with their model was that it wasn’t a flat monthly fee – it was all a la carte viewing, which could easily make it the most expensive choice by far.
For months now there has been speculation and rumors that Amazon would launch an unlimited service, and today Amazon announced that they were doing just that. Even better than an announcement in general however, is the fact that they’ve done it at a price that undercuts Netflix and incorporates an Amazon Prime membership. Or, more accurately, anyone who pays for $79 per year for an Amazon Prime membership (which offers free two-day shipping) will have access to Amazon’s unlimited streaming service. Those people who currently have a free Prime membership (for being in college or a part of Amazon Mom, etc.) do not have access to the free streaming videos, but not surprisingly, Amazon has made it quite easy to “upgrade” to a paid membership.
To break down the math a little, Netflix’s streaming only option costs $7.99 per month, whereas Amazon’s Prime for $79 per year comes out at just over $6.58 each month. It will be interesting to see if Netflix will drop their price in response to Amazon’s announcement.
Whether or not Amazon will reap profits from this inclusion of a service at no additional fee, it is a strong shot across Netflix’s bow. A lot of people already have Prime memberships, and the inclusion of free streaming will certainly make those people think twice about having Netflix in addition to Prime. After all, if you cancel Netflix you can still stream tons of shows for free, but if you cancel Prime you can’t get free fast shipping on your purchases.
In the coming days we’ll get a far better idea about where Amazon or Netflix offers more/better selections, and if the quality of video on Amazon’s service has been affected, but for now it certainly appears as though Amazon has made an excellent inroad into a market already heavily dominated by one player.
