A Stand-Alone Amazon Streaming Service? Kindle Fire Makes It More Likely
BTIG analyst Richard Greenfield thinks it's more than likely Amazon CEO Jeff Bezos will "follow (Netflix CEO) Reed Hastings' playbook" and eventually break off the streaming business and use the Kindle Fire to, um, fuel its growth.
Greenfield said Amazon Prime -- the service it launched in 2005, which gives shoppers unlimited two-day shipping for $79 a year -- has helped it establish a recurring revenue subscriber base, and he pointed out that it now offers subscribers 11,000 movie and TV titles.
"Amazon has also made subscribing to Prime for content more compelling (away from the shipping benefits) by launching a low-priced Tablet, Kindle Fire, that offers cloud storage and great video playback," he wrote.
The video business has had the added effect of extending consumer time with the Amazon brand, Greenfield said.
As to when, and if, Amazon will spin off the video streaming business, Greenfield put it this way: "Looking at how Netflix approached its evolution, it is hard not to see parallels with Amazon's evolution, with Amazon essentially incubating Instant Video streaming within Prime. Given Netflix's bold pricing/packaging moves (which has likely helped open the door for Amazon and other competitors), we would not be surprised to see Amazon offer a standalone streaming video product in the next six-months."
And, he said, Amazon might even spin it off totally from Prime, allowing Amazon to drop the price below the $79 a year ($6.58 a month) price tag the service currently carries.
- With Fox deal, Amazon enters the deep end of streaming content pool
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- Appetite for online content will drive up prices of Hollywood programming
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