Cataclysm alert: Amazon launches Netflix-like streaming

Posted by Mike Luttrell

Amazon has just launched a new video service that allows users to stream as many movies or TV shows as they want, in what is the most credible threat yet to Netflix's absolute domination in this market.

With its catalog of thousands of titles, Netflix has grown to extreme popularity. Because users can watch as much as they want for a low monthly fee, it is a household name much more so than Vudu, CinemaNow, and other movie streaming services that require users to pay for each movie.

To date, the only real competitor has been Hulu Plus, which has a much stronger TV library but only a handful of movies, and the service has been off-putting to users because even though it charges a monthly fee, some videos still force users to view commercials.

Amazon has the brand recognition and the customer base to really pose a threat to Netflix, at a time when Netflix has begun to seem complacent and unbeatable. However, there's a catch.

Amazon's instant video service will only be available to customers who have an Amazon Prime membership. And then we get into the issue of the human psyche. Amazon Prime costs $79 per year, but customers need to pay the entire year upfront. Meanwhile, Netflix's bottom-of-the-barrel, cheapest plan costs $96 per year. But most people wouldn't calculate it that way because it charges customers every month. So, the advertised price is $8/month. And when customers look at an $8 price tag versus a $79 price tag, they may not be able to digest the reality.

The reality is that Amazon Prime works out to be about $6.58 per month. So it's cheaper than Netflix's streaming service, and users get all the benefits of being a Prime member, like free two-day shipping. In other words, it's a cheaper and more rewarding service, if it can actually make people realize that.

Amazon still has a long way to go, though. Netflix streaming services are available not only on computers but also on Internet-connected TVs, Blu-ray players, game consoles, iPhones, iPads, and set-top boxes.

Amazon's instant video  will also be available on some of these devices, but game consoles and iGadgets are not among the list of compatible products.

Amazon claims there are already "millions" of Amazon Prime subscribers. They have access to the service now, at no charge. Anyone else can sign up for a free one-month trial of Prime to see it for themselves.v