Amazon appears set to take its Unbox online video download service to the next level with executives this week saying that a pay per view streaming service will be introduced. Offhand comments from CEO Jeff Bezos seems to be where the idea came from.
There are no technical details, but our bet is that Amazon will be working with Microsoft technology for this, using Silverlight and PlayReady and is holding back an announcement until these are both ready for prime time. It is likely to come in the form of an upgrade to the existing download manager that Unbox uses. Our own preference would be to see it offered like that and also using Adobe Media Player.
Customers of Amazon are very happy paying for services from Amazon, and it is perhaps one of the few companies that has the servers and streaming capability already in place, to do this with virtually no additional costs to begin with.
This very much has to be seen as a foil for iTunes, which offers downloads but no streaming so far. Instead Apple’s approach has been to license content around the world and it has recently launched video services in the UK and France, including local offerings.
By going down the streaming route, Amazon will be competing with content owners and broadcasters directly, such as Hulu, and the new Time Warner service just announced for streaming ad supported TV series, and companies such as NetFlix, which offers free streaming as a bonus to existing online DVD rental subscribers.
The reason that all of these services don’t attract lots of customers is because the content owners fail to see what the right kind of service would look like. Steve Jobs got music right because he emulated the music marketplace of his youth, which he loved ‘ buy tracks not albums, all for the same price, and keep them permanently like a record collection. Video is of course different and the successful operator needs to emulate multiple exploitation chains- movies and TV series. Movies need to be $7 to $10 for a first viewing, like at the cinema, and then later a file should be purchasable for the same prices as a DVD less the cost of burning it, say $12 or so. A pay per view should emulate a DVD rental at between $2 and $3 depending on how old the movies are and so on, until some are free with adverts, just like repeats on the TV of old movies. A similar process needs to be gone through for TV series and then the two models somehow merged. Apple so far is the only company that is getting close to emulating this process, but this may be one more step along the way for Amazon ‘ but it needs to internationalize it rapidly, not just supply it in the US.