Amazon is reportedly expanding its existing OTT video service to include a new subscription element. The hope is this new service will compete more directly with Netflix, whose subscription streaming service has become the darling of the "alternative TV" crowd and which is to date the most successful OTT TV service provider.
OTT pay-per-view and electronic sell-thru providers such as Vudu, Amazon, and Blockbuster have lost out to Netflix's "Watch Instantly" streaming service, which offers its subscribers a combination of DVD-by-mail and on-demand streaming from an ever-expanding library of older content for less than $10 per month.
At the moment, Amazon offers OTT viewers an iTunes-like service, selling individual episodes of TV programs and renting/selling movie downloads through enabled TVs, game consoles, Blu-ray players, and Internet set-top boxes. Though TV show rentals were originally priced at $1.99 per show, within a few hours of Apple's announcement, Amazon matched Apple's price for TV shows from ABC, FOX, and the BBC, featuring more than 260 shows.
According to The Wall Street Journal, the new service is likely to launch in time for the holiday season, but may be delayed if content negotiations get sticky (as they likely will). One incarnation being tossed around I find particularly attractive: the video service would be available for free to Amazon Prime customers (like myself) who pay $79 a year to get 2-day reduced-rate shipping on all merchandise.
Given Amazon's reach and its expanding widget footprint on Blu-ray players and net-enabled TVs, it is in a good position to build a subscription service. However, as Netflix recently discovered, gaining access to content for a subscription service can be incredibly expensive and difficult to come by.
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Wall Street Journal (subscription required)
Bloomberg
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