As part of its mission to provide planet earth with the largest selection of consumer products and services, Amazon.com launched Amazon.com Prime Instant Video in February 2011. The $79 per year annual service, an extension of its Amazon Prime two- day shipping program for all Amazon purchased goods, now features over 36,000 movies and television shows that can be streamed to its customers’ video devices, at no additional cost. In its most recent quarterly letter to shareholders, Netflix, Amazon.com’s most significant streaming competitor, indicated that of its top 200 most popular television shows and movies in the fourth quarter, Amazon.com offered 37 percent of these to its viewers. This overlap has risen from zero two years ago, and is the highest level of overlap among Netflix’s key competitors.
Amazon.com. like Netflix, has recently become more interested in proprietary content that can be displayed only to Amazon.com Prime Instant Video customers. Toward that end Amazon.com recently added FX crime drama Justified to its expanding line-up of exclusive content. Amazon has also announced exclusive agreements with PBS for Downton Abbey, and the CBS series Under the Dome, based on the Stephen King novel, and produced by Stephen Spielberg. Through Amazon Studios, an original movie and series production arm of Amazon.com, Amazon currently has 11 min-series in either trial or production mode, including five children’s series, and six comedy pilots. Amazon intends to air the productions on Amazon Instant Video, Prime Instant Video, Lovefilm UK and Germany (an Amazon.com subsidiary), where customers will pay no additional cost to view them. Amazon intends to gather feed-back during the pilot mode to determine further funding.
Amazon.com briefly experimented with a monthly subscription service in November of 2012 in advance of the holiday shopping season, but mysteriously pulled it after two weeks, preferring to keep Amazon Prime an annual, rather than monthly subscription service. A major motivating factor for Amazon.com may have been its desire to avoid getting stuck with a massive shipping bill during its seasonally strong fourth quarter, which ultimately revealed a declining rate of sales growth, which, in turn, has upped the ante on succeeding with its streaming strategy.