The Hidden Opportunity Amazon Must Follow

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The following video is part of our "Motley Fool Conversations" series, in which senior technology analyst Eric Bleeker and Chief Technology Officer Jeremy Phillips discuss topics across the investing world.

In today's edition, Eric and Jeremy discuss the prospect of Amazon breaking its Netflix-like video library out of Amazon Prime. So far, Amazon has been bundling streaming as a means of attracting users, but reports speculate that studio pressure could push Amazon to offer streaming as a stand-alone service. While the move makes sense on the surface, Eric and Jeremy note the extreme power of creating recurring revenue models (like Amazon Prime) in retail. That's the formula that has led Costco to about 60 million members. While Amazon is contemplating streaming's future, the company should make sure Amazon Prime remains an extremely compelling play, as it could form a dominant Costco-like model for the future.

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At the time this article was published Eric Bleeker has no positions in the stocks mentioned above. Jeremy Phillips has no positions in the stocks mentioned above. The Motley Fool owns shares of Amazon.com, Costco Wholesale, and Wal-Mart Stores.Motley Fool newsletter services recommendAmazon.com, Costco Wholesale, Netflix, and Wal-Mart Stores. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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