Amazon to announce video subscription service this week

Nathan Pensky · February 7, 2012 · Short URL:

Only one day after Netflix gains a new competitor in Redbox/Verizon deal, Amazon adds another

Looks like more bad news for Netflix. This week Amazon will announce the launch of a subscription online streaming video service, according to one report citing inside sources. This comes only one day after a similar report broke that Verizon and Redbox would be teaming up to create their own online video streaming service.

Amazon has been busy of late making licensing deals with CBS Corp, Warner Bros, Fox, Sony Corp, NBC Universal, Walt Disney Co, and now most recently, Viacom.

Viacom Chief Executive Philip Daumann indicated that his company would be announcing a deal with an online video service this week,  confirming the information from two inside sources, as reported by Reuters, that an Amazon announcement regarding its new streaming service is imminent.

As it currently stands, streaming video on Amazon has been offered as a perk for Amazon Prime members, a subscription service that costs an annual fee of $79 and allows users access to the company's Kindle Lending Library, free two-day shipping, in addition to Amazon Instant Video

However, the new streaming video service would be a stand-alone service meant to boost sales of the Kindle Fire tablet, said sources.

It's not yet clear how this streaming video service would affect Kindle Fire sales directly, thoug it may have something to do with the company's release last month, in which it claimed that the Amazon Prime Instant VIdeo streams increased by 300% during Q4 2011, a period in which Kindle Fire sales skyrocketed. One month of Amazon Prime comes free witht he purchase of a Kindle Fire.

So yes, considering that not one but two potentially disastrous competitors are entering the video streaming fray in quick succession, Netflix should be very afraid.

American telecommunications company Verizon and Coinstar, Inc., the company behind Redbox, officially announced Monday their joint venture to enter the world of online video streaming, with the clear intent to offer competition to Netflix. Verizon holds a 65% ownership share, while Coinstar is reportedly throwing in an initial $14 million to the venture.

The new, as-yet-unnamed service will offer streaming video content, as well as access to Redbox's 35,000 kiosks, for a flat monthly fee.

Rumors have been swirling for the past few months that the top-secret project would launch sometime in early 2012. Now, according to the joint release, the project will launch in the second half of 2012. While Details have been few, what is clear is that the two companies will "offer all of the convenience, simplicity and value of Redbox...combined with a new content-rich video on-demand streaming and download service from Verizon."

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