updated 05:35 pm EST, Wed February 2, 2011
Amazon subscription movies still in talks
Amazon's inadvertently spoiled Amazon Prime movie service may still have a long way towards its release, tips uncovered today. In spite of code references, it so far has only independent movies and doesn't have any deals with major studios. Executives talking off the record to the LA Times wanted to be sure it could pay as much as Netflix for rights and whether it would cannibalize DVD sales from Amazon's online store.
The service was to have launched within the first half of the month but had been pushed back to at least the end of the month as a result. Unidentified technical issues were also said pushing it back.
Like with most Amazon plans, the aim would be to compete on price and undercut an established rival, even if it means taking a loss. An Amazon Prime account at $79 per year is less expensive than Netflix's streaming-only plan at $96 and would still have bonuses like free expedited shipping.
The strategy would still include pay-per-title rentals and sales and could be key to Amazon trying to establish itself as a major media source. Competitors like Netflix, Apple's iTunes and Microsoft's Zune Marketplace either offer individual downloads or subscriptions but never both. An expanded Amazon Video on Demand could maximize the number of viewers or accommodate any shifts in the market towards one approach or the other.