Amazon Gets on Board With UltraViolet Movie System

An Amazon.com executive said Tuesday that the retailer has signed a deal with a Hollywood studio to sell movies that can be downloaded from an online "locker" system five studios have put together.

The extent of Amazon.com Inc.'s support of the UltraViolet online locker system is unclear. But the deal signals that Amazon is at least open to trying it. Studios are hopeful that UltraViolet is attractive enough to consumers that they keep buying movies rather than renting, which is less profitable for studios.

If Amazon fully joins the system, it would hugely boost UltraViolet's chance of becoming a mainstream technology.

FULL ARTICLE - http://www.nytimes.com/aponline/2012...t.html?_r=2&hp

Netflix’s CEO Reed Hastings and CFO David Wells reveal that they “expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours.”

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Amazon looking into taking on Netflix

Jeff Bezos and his team at Amazon are weighing a move to beef up the Web retailer’s video-streaming service — possibly carving it out as a standalone, subscription-based operation, industry sources told The Post.

Such a move, if undertaken, would set the retail behemoth in the same competitive orbit as Netflix. Currently, Amazon’s Instant Video comes free with Amazon Prime, the $79 unlimited shipping service.

“They’re looking into it being a standalone subscription service,” one content executive said. A second exec noted they believe Amazon is chewing over a possible charge.

The Internet retailer does have a paid video-on-demand movie and TV service — but the streaming service would be different.

“The big issue is their bundled media service,” said one digital media executive. “The subscription service, with the goodies being free video, is contractually an issue for the licensers.”

Tinseltown talent doesn’t like being a loss-leader for Amazon shipments of everything from diapers to digital devices.

Word that Bezos may be looking to add muscle to its video service comes nearly one year after Amazon launched Instant Video last February. In July, Amazon paid CBS around $100 million for 2,000 hours of TV shows. It then followed up with deals for Fox content such as “Arrested Development,” and with Disney and NBCUniversal.

The company has had little to say in recent months, however, though one source said that Amazon was “refreshing its checkbook.”

Amazon has been paying fees that are based on the number of subscribers. Amazon Prime has 7 million to 8 million subscribers, analysts estimate. Netflix, which reports fourth-quarter results today, has 20 million streaming subs globally.

Paul Verna, senior analyst at eMarketer, said: “Amazon is aggressively pursuing the same content strategy as Netflix and is spending a lot upfront to try to secure exclusivity. They won’t always get it, but they need to differentiate themselves.”

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Amazon: No plans to launch a standalone video service soon

Brad Beale, Head of Digital Video Content Acquisition at Amazon, said in an interview Wednesday that the company is unlikely to break out the video subscription offering anytime soon. “The bundle of benefits that come with Amazon Prime make perfect sense to offer to customers,” Beale said. “The way that Prime Instant Video is offered today — we’re going to continue that approach at least into the near future.”

Even before adding the video component, Beale said that Prime was an incredible value. The offering provides free, two-day shipping to customers who pay an annual $79 subscription. We’ve believed for a while that adding video could entice some customers to sign up for Amazon Prime who might otherwise not have — and once they’ve paid the annual subscription fee, they’re likely to take advantage of the free shipping. In that sense, video could be seen as a loss leader for driving more physical retail sales.

There’s also the fact that having a free subscription service could help boost transactional sales through Amazon’s VOD and electronic sell-through offering. While Prime Instant Video has 15,000 titles for free viewing, it doesn’t have many of the latest new release films or in-season TV episodes. For newer content, Amazon offers more than 100,000 titles for rental or purchase. So an Amazon user who got hooked on older seasons of Downton Abbey or Sons of Anarchy on the free service might convert to being a paid user to watch the current seasons of those shows.

As Amazon adds content, it’s also looking to boost awareness of what’s available on the service. That includes placement of a letter from Amazon CEO Jeff Bezos on the site’s homepage, letting the millions of users who stop by every day know what new content is available from Amazon Prime. That kind of promotion is driving awareness and usage, Beale told me. As more customers learn what’s available, and as Amazon continues to improve the offering with even more content, he expects customer adoption to grow even more.

FULL ARTICLE - http://gigaom.com/video/amazon-no-st...video-service/

Amazon’s Prime Directive: No Standalone Subscription Video For Now

Ultimately, Amazon has an interest in bundling these services, whether streaming video, lending libraries or two-day shipping, trumps its need to make a profit on every deal. It’s about promoting the full range of its wildly diverse ecosystem as a single product.

Amazon has exactly as much interest in securing regular shoppers as Target, monthly active users as Facebook, devoted superfans as Apple, and complimentary services as Google.

Remember Amazon’s long play with the Kindle Fire:Amazon could try to blow away Netflix on content, by making a deal with Starz or HBO. Instead, they’ll try to blow them away on price, offering mostly identical streaming content plus additional value-added services for a lower annual cost.

The more you stream television shows from Amazon Prime, the more tempted you are to buy and download movies from Amazon Instant Video that aren’t on Prime. The more lending library books you read on a Kindle, the more books you buy on the Kindle. The more you use one Kindle, the more tempted you are to buy another Kindle device — if not for yourself, then for the rest of your family. And if Amazon finally really does sell a 9-inch Kindle Fire, then you’ll do even more reading and watching and shopping on that.

Finally, you’re an Amazon customer in an Amazon household — especially if all of those services help encourage you to buy more goods shipped in two days or less.

FULL ARTICLE - http://www.wired.com/epicenter/2012/...ndalone-video/