Currently Amazon offers two ways to stream movies and TV episodes: buy them individually through the Amazon Instant Video Store and stash them in the cloud, or pay a yearly $79 fee for Amazon Prime which adds a limited library of movies and TV shows to stream for free. Both options have their pluses and minuses, but the latter serving -- Amazon Prime Instant Video -- doesn't really compete with the likes of Netflix in its current state.
But that's about to change. The New York post claims that Amazon is currently debating on whether to spin off the Prime Instant Video service as a standalone subscription-based offering, rivaling Netflix. One digital media executive who remained anonymous said that Amazon's current scheme is "contractually an issue for the licensers," meaning copyright holders aren't too keen with their content being served up for free as a bonus.
As the New York Post states, "Tinseltown talent doesn’t like being a loss-leader for Amazon shipments of everything from diapers to digital devices."
Amazon launched Instant Video last February, and shelled out $100 million to CBS for 2,000 hours of TV shows -- including the five Star Trek shows -- in July. Amazon then landed deals with Fox, Disney and NBCUniversal. Through Amazon Prime, subscribers have access to Arrested Development, The X-Files, Glee, Lost, Gray's Anatomy, The Tudors and more.
Amazon Prime currently has around 7 to 8 million subscribers, all of which also get free 2-day shipping. Amazon has been paying fees on the content based on the number of subscribers, but insiders claim Amazon is currently "refreshing its checkbook." By comparison, Netflix has 20 million streaming subscribers globally.