4 ms·

I used to be really bullish on Netflix, but then Amazon started giving Amazon Prime members streaming access to a huge collection of free TV and movies. The off

by xiaoma 12y ago

I used to be really bullish on Netflix, but then Amazon started giving Amazon Prime members streaming access to a huge collection of free TV and movies. The offerings aren't exactly the same and each platform does have its own exclusive shows, so a huge TV fan might want both. But for a lot of people, one is enough and if that one is Amazon Prime then you get free shipping of all your Amazon deliveries as a bonus! For those of us who had already become Prime members for the shipping, Netflix has even less of a hope of competing. Due to its size, Amazon can also expect to extract an better selection of streaming titles from media companies. Netflix should be terrified.

anigbrowl 12y ago
I'm sure they're worried, but Netflix has a big lead on Amazon in the original content stakes. As a filmmaker I would much rather sign a deal with them than with Amazon, even for the same nominal dollar amount - Netflix has built an awful lot of industry good will over the last 10 years by treating producers fairly.
heynk 12y ago
I had the same assumptions about Amazon Prime's video offering being a replacement for Netflix. In fact, that was my motivating factor in buying prime. Since then, I have used Amazon video only a few times and Netflix pretty much every day. Netflix has such better selection and platform support; Amazon video is a pain to use. Ironically, I now love Prime for the 2-day shipping and would happily renew it without the video offering.
serve_yay 12y ago
It doesn't seem like a lot of people actually use Amazon's video thing, though. But besides that, I think Netflix has a real problem in that they are a thin layer of tech (OK maybe not so thin) over a huge amount of intellectual property. Not only do they not own that IP, the companies they license from can just keep increasing their rates as Netflix makes more money. They were really cleaning up for a while after their deal with Starz a few years back, but Starz wised up and demanded more money when the contract was up for renewal. I don't see how they get around this. On the other hand, people do seem to just watch whatever is on Netflix. So, maybe they can get away with licensing a less-expensive mix of content plus of course their in-house stuff.
- dragonwriter 12y ago
  > Not only do they not own that IP, the companies they license from can just keep increasing their rates as Netflix makes more money. HBO ran into the same problem (with a different delivery platform) once they ran into competition as a premium cable movie channel, and they responded much the same way Netflix is -- transitioning to increasingly prioritize first-party content. OTOH, when HBO didn't, there wasn't anyone doing basically the same thing on a different tech platform around -- which makes HBO Go being made available independently of cable a big threat to Netflix. > On the other hand, people do seem to just watch whatever is on Netflix. So, maybe they can get away with licensing a less-expensive mix of content plus of course their in-house stuff. Netflix being one of many "internet channels" with a limited library of mixed first- and third-party content is clearly where things are heading, the question is how they grow a subscriber base with more and more entrance to that space, some of which, like HBO, have a lot more experience in pretty much every aspect of that kind of operation except the internet delivery end.
  - Tiktaalik 12y ago
    > the question is how they grow a subscriber base with more and more entrance to that space, some of which, like HBO, have a lot more experience in pretty much every aspect of that kind of operation except the internet delivery end. Sounds like HBO and Netflix could be good merger partners?
- kjksf 12y ago
  This is much more complicated than "content companies can raise prices at will". Netflix makes ~$5.6 billion per year. A big chunk of that goes to content licensing so they spend several billion dollars a year on content. That revenue is pure profit for content companies. If you're a CEO of content company and e.g. Netflix is willing $100 million a year for, say, license all seasons of "Friends", you can't simply say "I want $110 million" and expect Netflix to pay it. If you're not willing to license for $100 million/year, then you're loosing $100 million/year of pure profit and shareholders like profit. The more money Netflix has to spend, the more they can shop around so content companies don't have as strong of a negotiation position as many seem to believe. And Netflix is being very smart by investing aggressively in their own content, which they'll own forever, which is an always growing asset.
baddox 12y ago
I don't know, I still know a lot of people who don't order anywhere near enough stuff online for Amazon Prime to be worth it. Honestly, these days I probably don't even buy something online more than every couple of months, although it probably only takes a few bigger packages a year to break even. As a "free" value-add to Prime shipping, Amazon streaming is nice (although I've never used it despite having Prime for years and not even having Netflix), but I don't think the package is anywhere near nice enough to immediately threaten Netflix.
w1ntermute 12y ago
I don't think Netflix has to worry about Amazon Instant Video at all. The problem with AIV is a total lack of consumer awareness. If I'm talking to a friend about the movie they saw last night, or what TV show they binge-watched over the weekend, they're almost always going to say "Netflix" (and it's not like "Amazon Instant Video" exactly rolls off the tongue). And there's not even any discussion about how there's an alternative. As far as the majority of consumers are concerned, Netflix is the only player in its category. It's basically like iPhone vs. Android in the US, but a lot, lot worse.
- tehwebguy 12y ago
  My observation is that Netflix Instant Streaming had the exact same total lack of consumer awareness for years while they built up their library. I do agree that Amazon needs a real name for the service, though.
- bigtunacan 12y ago
  If we are making the comparison that they are iPhone vs. Android respectively (Netflix == iPhone && Amazon == Android) then we should expect that Amazon will eventually dominate the US market place, just like Android is doing now. http://bgr.com/2014/07/01/android-market-share-2014/ http://bgr.com/2014/07/01/android-market-share-2014/ TL/DR; Android market share in US = 61.9%/iPhone US market share in US = 32.5%.
  - w1ntermute 12y ago
    The comparison has nothing to do with the change in their market shares, or who will dominate in the future. I'm purely giving an example of how consumer awareness is completely different between nerds and the general population. Just because everyone on HN knows about AIV doesn't mean that the average consumer knows about it. Predicting whether or not AIV will gain consumer awareness is a completely different matter, and I don't think that comparisons between iOS and Android have any place there, since the markets are completely different.
  - yzzxy 12y ago
    Android caught up because competition within the Android market brought prices down and features up, and encouraged consumer-attracting partnerships with carriers (cheaper phones on contract). This isn't relevant to the Amazon/Netflix knife fight.
sp332 12y ago
Amazon might get better later, but for now, the selection of free movies is very poor.
clavalle 12y ago
If Amazon prime's streaming interface wasn't so terrible I might agree with you. Occasionally I try to watch it (I have Amazon Prime anyway) but they make it so hard to navigate that I usually give up after a few seconds. It is obvious it is not Amazon's first, second, or third concern.
- andrewjkerr 12y ago
  This is the #1 reason why I still have Netflix. As of a few months ago when I used Amazon Instant, Netflix has auto-play while Amazon did not, Netflix automatically chooses between SD and HD while Amazon made you pick, and just a bunch of other things Netflix does right that Amazon does so so wrong.
- digikata 12y ago
  Agreed! I can access Netflix and Amazon Prime Video on a Roku at home, and the Amazon interface is really bad. What might be called catalog "grooming" is bad too - associated shows for, say a TV series, might show up under the same entry, or it might be separate items - sometime there isn't even a common title keyword or phrase between the items. I avoid Amazon unless the content is exclusive to that service. Even then, I rarely bother to search on Amazon for that exclusive content as Netflix provides more watchable material than my time budget anyway.
- stevewilhelm 12y ago
  The Amazon streaming UX on fireTV is significantly better than Netflix. The video compression and streaming is also better.
  - dhbanes 12y ago
    I was wondering if Amazon's poorly implemented interface on Roku was intentional. Now that you comment how much better it is on Fire TV, it seems that might be the case. This strikes me as a poor decision, as Fire TV is akin to the "razor" with Amazon Prime memberships being the "blades" that should bring in the recurring revenue.
sharkweek 12y ago
I agree in some senses, but in general... I'm going to pay $7-10 bucks a month for 3-4 services (I currently pay for Netflix, Amazon Prime, and Hulu) - there is plenty of crossover, but for < $30 a month, I'm getting plenty of what I miss w/o a $50 cable TV subscription - Now if only someone could do something legally about live sports...

by xiaoma 12y ago

anigbrowl 12y ago

I'm sure they're worried, but Netflix has a big lead on Amazon in the original content stakes. As a filmmaker I would much rather sign a deal with them than with Amazon, even for the same nominal dollar amount - Netflix has built an awful lot of industry good will over the last 10 years by treating producers fairly.

heynk 12y ago

I had the same assumptions about Amazon Prime's video offering being a replacement for Netflix. In fact, that was my motivating factor in buying prime. Since then, I have used Amazon video only a few times and Netflix pretty much every day. Netflix has such better selection and platform support; Amazon video is a pain to use. Ironically, I now love Prime for the 2-day shipping and would happily renew it without the video offering.

serve_yay 12y ago

It doesn't seem like a lot of people actually use Amazon's video thing, though. But besides that, I think Netflix has a real problem in that they are a thin layer of tech (OK maybe not so thin) over a huge amount of intellectual property. Not only do they not own that IP, the companies they license from can just keep increasing their rates as Netflix makes more money. They were really cleaning up for a while after their deal with Starz a few years back, but Starz wised up and demanded more money when the contract was up for renewal. I don't see how they get around this. On the other hand, people do seem to just watch whatever is on Netflix. So, maybe they can get away with licensing a less-expensive mix of content plus of course their in-house stuff.

dragonwriter 12y ago
> Not only do they not own that IP, the companies they license from can just keep increasing their rates as Netflix makes more money. HBO ran into the same problem (with a different delivery platform) once they ran into competition as a premium cable movie channel, and they responded much the same way Netflix is -- transitioning to increasingly prioritize first-party content. OTOH, when HBO didn't, there wasn't anyone doing basically the same thing on a different tech platform around -- which makes HBO Go being made available independently of cable a big threat to Netflix. > On the other hand, people do seem to just watch whatever is on Netflix. So, maybe they can get away with licensing a less-expensive mix of content plus of course their in-house stuff. Netflix being one of many "internet channels" with a limited library of mixed first- and third-party content is clearly where things are heading, the question is how they grow a subscriber base with more and more entrance to that space, some of which, like HBO, have a lot more experience in pretty much every aspect of that kind of operation except the internet delivery end.
- Tiktaalik 12y ago
  > the question is how they grow a subscriber base with more and more entrance to that space, some of which, like HBO, have a lot more experience in pretty much every aspect of that kind of operation except the internet delivery end. Sounds like HBO and Netflix could be good merger partners?
kjksf 12y ago
This is much more complicated than "content companies can raise prices at will". Netflix makes ~$5.6 billion per year. A big chunk of that goes to content licensing so they spend several billion dollars a year on content. That revenue is pure profit for content companies. If you're a CEO of content company and e.g. Netflix is willing $100 million a year for, say, license all seasons of "Friends", you can't simply say "I want $110 million" and expect Netflix to pay it. If you're not willing to license for $100 million/year, then you're loosing $100 million/year of pure profit and shareholders like profit. The more money Netflix has to spend, the more they can shop around so content companies don't have as strong of a negotiation position as many seem to believe. And Netflix is being very smart by investing aggressively in their own content, which they'll own forever, which is an always growing asset.

baddox 12y ago

I don't know, I still know a lot of people who don't order anywhere near enough stuff online for Amazon Prime to be worth it. Honestly, these days I probably don't even buy something online more than every couple of months, although it probably only takes a few bigger packages a year to break even. As a "free" value-add to Prime shipping, Amazon streaming is nice (although I've never used it despite having Prime for years and not even having Netflix), but I don't think the package is anywhere near nice enough to immediately threaten Netflix.

w1ntermute 12y ago

I don't think Netflix has to worry about Amazon Instant Video at all. The problem with AIV is a total lack of consumer awareness. If I'm talking to a friend about the movie they saw last night, or what TV show they binge-watched over the weekend, they're almost always going to say "Netflix" (and it's not like "Amazon Instant Video" exactly rolls off the tongue). And there's not even any discussion about how there's an alternative. As far as the majority of consumers are concerned, Netflix is the only player in its category. It's basically like iPhone vs. Android in the US, but a lot, lot worse.

tehwebguy 12y ago
My observation is that Netflix Instant Streaming had the exact same total lack of consumer awareness for years while they built up their library. I do agree that Amazon needs a real name for the service, though.
bigtunacan 12y ago
If we are making the comparison that they are iPhone vs. Android respectively (Netflix == iPhone && Amazon == Android) then we should expect that Amazon will eventually dominate the US market place, just like Android is doing now. http://bgr.com/2014/07/01/android-market-share-2014/ http://bgr.com/2014/07/01/android-market-share-2014/ TL/DR; Android market share in US = 61.9%/iPhone US market share in US = 32.5%.
- w1ntermute 12y ago
  The comparison has nothing to do with the change in their market shares, or who will dominate in the future. I'm purely giving an example of how consumer awareness is completely different between nerds and the general population. Just because everyone on HN knows about AIV doesn't mean that the average consumer knows about it. Predicting whether or not AIV will gain consumer awareness is a completely different matter, and I don't think that comparisons between iOS and Android have any place there, since the markets are completely different.
- yzzxy 12y ago
  Android caught up because competition within the Android market brought prices down and features up, and encouraged consumer-attracting partnerships with carriers (cheaper phones on contract). This isn't relevant to the Amazon/Netflix knife fight.

sp332 12y ago

Amazon might get better later, but for now, the selection of free movies is very poor.

clavalle 12y ago

If Amazon prime's streaming interface wasn't so terrible I might agree with you. Occasionally I try to watch it (I have Amazon Prime anyway) but they make it so hard to navigate that I usually give up after a few seconds. It is obvious it is not Amazon's first, second, or third concern.

andrewjkerr 12y ago
This is the #1 reason why I still have Netflix. As of a few months ago when I used Amazon Instant, Netflix has auto-play while Amazon did not, Netflix automatically chooses between SD and HD while Amazon made you pick, and just a bunch of other things Netflix does right that Amazon does so so wrong.
digikata 12y ago
Agreed! I can access Netflix and Amazon Prime Video on a Roku at home, and the Amazon interface is really bad. What might be called catalog "grooming" is bad too - associated shows for, say a TV series, might show up under the same entry, or it might be separate items - sometime there isn't even a common title keyword or phrase between the items. I avoid Amazon unless the content is exclusive to that service. Even then, I rarely bother to search on Amazon for that exclusive content as Netflix provides more watchable material than my time budget anyway.
stevewilhelm 12y ago
The Amazon streaming UX on fireTV is significantly better than Netflix. The video compression and streaming is also better.
- dhbanes 12y ago
  I was wondering if Amazon's poorly implemented interface on Roku was intentional. Now that you comment how much better it is on Fire TV, it seems that might be the case. This strikes me as a poor decision, as Fire TV is akin to the "razor" with Amazon Prime memberships being the "blades" that should bring in the recurring revenue.

sharkweek 12y ago

I agree in some senses, but in general... I'm going to pay $7-10 bucks a month for 3-4 services (I currently pay for Netflix, Amazon Prime, and Hulu) - there is plenty of crossover, but for < $30 a month, I'm getting plenty of what I miss w/o a $50 cable TV subscription - Now if only someone could do something legally about live sports...