Amazon offers free online movies to Prime members

February 22, 2011 By DANA WOLLMAN , AP Technology Writer
The Amazon homepage appears on a screen in Washington, DC. US online retail giant Amazon on Tuesday launched a movie streaming service that competes directly with Internet film star Netflix.

Online shoppers subscribing to's premium membership are getting a new entertainment feature that will allow them to watch movies over the Internet, just as they can through Netflix's rapidly growing video subscription service. Inc.'s Prime membership charges $79 annually for free two-day shipping and low-cost next-day shipping. Beginning Tuesday, the millions of people subscribing to the Prime service can also watch roughly 5,700 movies and television shows through Amazon's on-demand video service at no additional charge.

The selection will include a mix of movies and TV shows, such as "The Girl with the Dragon Tattoo" trilogy, the documentary "March of the Penguins" and the 1970s British comedy series "Fawlty Towers." All of those titles are also available through Netflix Inc.'s much larger online video library, which offers more than 20,000 movies and TV shows.

Amazon's expansion into video streaming still poses a threat to Netflix, which now has 20 million subscribers.

The competition from a deep-pocketed rival such as Amazon could make it more difficult for Netflix to attract and retain subscribers looking to save money. Netflix offers a streaming-only service that costs $8 per month, or $96 annually, but most of its subscribers pay more so they can also receive some DVD-by-mail rentals. Netflix's most popular combination plans cost $10 to $20 per month.

With another bidder in the video-streaming market, movie studios may be able to demand more money for the licensing rights. That could raise Netflix's expenses and lower its profit margins.

"When you have a big and growing market, there will be competition," said Netflix spokesman Steve Swasey.

The specter cast by Amazon rattled investors as Netflix shares dropped $13.83, or 5.9 percent, to $221.69 in afternoon trading Tuesday. Amazon shares shed $5.57, or 2.9 percent to $180.93.

Amazon's streaming feature also could hurt cable and satellite TV providers by creating a cheaper entertainment channel. All but about 1,700 of the titles in Amazon's streaming library are TV shows, Cameron Janes, director of Amazon Instant Video, said in an interview with The Associated Press.

People can stream these movies and shows on PCs and Macs, or through about 200 different Internet-connected TVs, set-top boxes and Blu-ray players.

Netflix's service also can be streaming through many of the same devices as well as the top-selling video game consoles, mobile phones and Apple Inc.'s popular iPad tablet computer.

Most of the movies and TV shows that Prime members can stream for free are at least several years old. Amazon has a broader catalog of about 90,000 movies and television shows that people can either rent or buy, often on the same day they become available for sale on DVD. That means Amazon customers who want to watch more recent movies and TV shows will have to pay extra to rent or buy those titles.

Netflix's streaming library also leans heavily on older material, although the company has been spending more to obtain the right to show some more movies closer to their DVD release dates. Netflix's DVD library offers more than 100,000 titles, including recently released movies

Amazon plans to add to the collection of movies and shows Prime members can watch for free, Janes said. He declined to be more specific.

"We're just getting started," he said. This is day one for us."

Explore further: Amazon to offer movie streaming service: report


Related Stories

Amazon buys European movie rental service Lovefilm

January 20, 2011

(AP) -- Inc. is buying Lovefilm, a European movie rental service akin to Netflix Inc. The deal announced Thursday heralds Amazon's entrance into a market where Netflix doesn't yet do business, and it left analysts ...

Amazon launches HD movie rental, TV show sales

April 22, 2009

(AP) -- Online retailer Inc. said Tuesday it is adding high-definition video to its on-demand service, offering consumers the ability to rent movies and purchase television episodes shown in HD.

Roku teams with Amazon to stream videos

March 4, 2009

Roku, maker of a $100 box that delivers streaming Netflix videos to consumers' TVs, is teaming with to vastly increase the number of movies and TV episodes consumers can watch through the device.

Wii becomes third console to stream Netflix

January 13, 2010

(AP) -- It's a triple crown for Netflix. Beginning in the spring, the Wii will become the last of the three current video game consoles to get instant viewing of Netflix movies and TV shows over the Internet.

Netflix adds to online movies with Relativity deal

July 6, 2010

(AP) -- Netflix Inc. is adding to the group of movies that its subscribers can watch online or over Internet-connected devices at the same time as they would have appeared on premium pay TV channels such as HBO or Showtime.

Recommended for you

Volumetric 3-D printing builds on need for speed

December 11, 2017

While additive manufacturing (AM), commonly known as 3-D printing, is enabling engineers and scientists to build parts in configurations and designs never before possible, the impact of the technology has been limited by ...

Tech titans ramp up tools to win over children

December 10, 2017

From smartphone messaging tailored for tikes to computers for classrooms, technology titans are weaving their way into childhoods to form lifelong bonds, raising hackles of advocacy groups.

Mapping out a biorobotic future  

December 8, 2017

You might not think a research area as detailed, technically advanced and futuristic as building robots with living materials would need help getting organized, but that's precisely what Vickie Webster-Wood and a team from ...

1 comment

Adjust slider to filter visible comments by rank

Display comments: newest first

not rated yet Feb 22, 2011
When you charge $79 for something, you can no longer tout your service as "free".

Fail +1

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.