Netflix Won the Battle, But Will Amazon Win the War

When we think of streaming movies online, the leader of the pack is Netflix.  This video streaming giant has grown to outsize the memberships of Amazon Prime, Hulu Plus, iTunes, and HBO Go combined.

At almost 30 million members (compared to Hulu Plus at 4 million), Netflix is the go-to application for streaming television and movies.  Netflix streaming is available through Nintendo Wii, AppleTV, Blu-ray disc players, the Roku Box, Xbox 360, the Nook Tablet, and even Amazon’s Kindle.  With the release of their first original series, “House of Cards,” Netflix is capturing the trend of “binge viewing,” with a lumped release of all 13 episodes.  Since the continued release of more original Netflix series, and the much anticipated return of Arrested Development’s new season recently released, Netflix continues to prove they have the leeway to take risks, for now.

Amazon has also branched out to offering studio-provided content through their own production arm, Amazon Studios.  Amazon Studios has reviewed 18,000 movie and pilot scripts with currently 24 movies being developed and tested with viewers.  They too are taking viewership behavior and applying it to how they produce content.  Amazon has just announced that they are slated to release 5 new original series available exclusively through Amazon Prime.  Amazon Prime (who doesn’t make its membership numbers public) is a service that combines two services under Amazon’s care, in an odd but rewarding pairing: live-streaming television and video, and two-day shipping on Amazon.com.  For $79 members have access to Amazon’s streaming library and free shipping for a year.  But this two-day shipping is Amazon’s leg up over Netflix.  As a branch of the largest online retailer, Amazon can offer this perk and has seen a boost in customer spending online.  Prime members have spent more than 150% since subscribing, allowing Amazon Prime to break even within three months of launching in 2010.  Not only a surge in sales, but this model has produced an estimated 10 million new Amazon Prime subscribers.

Netflix can continue to forge ahead, take risks, and continue to shape the way we consume media, while looking back at Hulu Plus, HBO Go, and Amazon Prime in the dust.  But Netflix will have to find an answer to added perks as members come to expect something extra for their loyalty.