Of Course Amazon Will Compete With Netflix

“My main question is, will NFLX’s competition adopt their pricing model – the “one price for unlimited streaming” model?  If not, why not? “
Today we got the answer:
“*AMAZON SAID DEVELOPING TV/MOVIE SUBSCRIPTION SERVICE, WSJ SAYS”  Story to follow.
Stay tuned.
EDIT:   The WSJ says:

Amazon.com Inc. is developing a Netflix-like subscription service that would offer TV shows and movies, according to people familiar with the matter. That service would be included as a bundle with its Amazon Prime shipping service, which costs $79 a year, those people said. An Amazon spokesman didn’t respond to a request for comment.”

I’m an Amazon Prime customer, but this makes zero sense to me.  Combining free 2-day shipping of hard goods with subscription based streaming video packages?  The two go together like oil and water.

Also, it seems like this story probably isn’t news at all – that Amazon has always been developing a package to compete with NFLX.  If anyone can make sense of the Prime bundling, please let me know.

EDIT #2:  I have changed my mind and I think this is brilliant.  Offer a streaming subscription for, say, $79 a year (they don’t even need to raise the price!) and it comes with free 2 day shipping… This gets customers who might otherwise not be into Amazon’s retail order flow to feel like they should order from Amazon because they already get free shipping – while at the same time the streaming subscription undercuts NFLX.  Brilliant, plus it can help them get a critical mass of customers to become important in the imminent content wars.  What’s the cost to Amazon?  Bandwidth – which they customers/cable companies/ LVLT/ someone else pays for!  Of course, Amazon needs infrastructure too, but I’m assuming they’ve been building that out already. 

-KD
disclosure: no position in AMZN or NFLX

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