Watch out, Netflix! Amazon planning subscription video service

Posted by Mark Raby

Amazon has reportedly been aggressively talking to Time Warner, Viacom, NBC Universal, and others to start building up a new online video service that would be the only firm competitor to Netflix's instant streaming program.

Bloomberg cites "people with knowledge of the talks" as saying that Amazon wants to step all over Netflix's territory by launching a service that would allow users to pay a flat monthly fee in exchange to be able to watch as many movies and TV shows as they wanted, anytime and anywhere.

Netflix's instant streaming service has become a runaway success, in part because it is the only one that offers such a deal. Other online video companies like Blockbuster On Demand and Vudu charge users for each individual TV show or movie they want to watch, in exchange for offering newer content.

The only close rival is Hulu Plus, though it's still extremely new and only limited to preview invitees at the moment. Although Hulu Plus does offer some movies on demand, its focus is more on TV shows. Additionally, some of its content requires users to watch commercials, which has made it an instant turn-off for many consumers comparing Netflix and Hulu Plus.

But where Netflix has really been able to reach critical mass is with its presence across so many consumer electronic devices, including every one of the three main gaming consoles, embedded apps built into TV sets, the iPhone and iPad, and numerous other set-top boxes like Tivos and Blu-ray players.

Amazon's existing digital video service, which is a pay-per-title infrastructure, also exists on some of these devices but not nearly to the extent of Netflix.

But having competition would surely cause there to be a price war, which could only lead to good things for consumers. If Amazon has a similar price structure to Netflix, though, the plan would probably fail.

Amazon has declined to comment on the speculation.