By Jacob Combs | Thompson on Hollywood August 18, 2011 at 4:14AM
Netflix beware. At the end of July, Amazon announced a partnership with NBCUniversal to provide some 9,000 streaming movies and TV shows to its Prime subscribers.
Now Amazon's Instant Video service is dramatically expanding and will now offer its customers over 100,000 options for streaming entertainment.
Amazon Prime members will still pay $79 a
monthyear to access those 9,000 movies and TV shows, but now even non-Prime subscribers will have access to purchase or rent titles from the entire library. New release movies will cost $3.99, and new TV episodes will stream the day after they air for .99.
As TechCrunch's Matt Burns points out, the Amazon/Universal moves are essentially a direct challenge to Netflix, the current heavyweight in an industry that is rapidly changing.
Just a month ago, Netflix raised the prices of its subscription plans by almost 60%, effectively signaling that it would be charging customers separately for DVD plans vs. streaming plans. (Netflix CEO Reed Hastings defends his price hikes here.) Amazon is cannily setting itself up as an alternative for outraged Netflix users blanching at the idea of paying out twice as much each month. Even discount DVD renter Redbox is following Netflix's lead with a 20% price hike--at the same time hoping to lure unhappy Netflix customers.
Still, Netflix's on-demand, unlimited streaming for one price subscription model can't yet be beat by Amazon's pay-as-you-go system, although Amazon's on demand options now dwarf Netflix's streaming catalogue. Although the retail giant's announcement might not make huge waves in the immediate future, it shows a clear path to more competition going forward—hopefully, competition that winds up offering more choices for movie lovers.