Originally Posted by Taperwood
If oil continues to climb, how long can Amazon hold their price on Prime membership? I don't see tying their streaming service to Prime membership as a very solid long-term strategy.
Netflix has the advantage here because their streaming cost is not tied to the cost of shipping. On the other hand, Amazon is using streaming as a loss leader for Prime membership. They would be thrilled if Amazon streaming took off but I don't think it matters to them as much as streaming matters to Netflix.
Originally Posted by Cygnus2112
True and NF could benefit from the rise in oil since oil prices affect everything. Ppl will look more to cheap entertainment. $5 per gallon of gas will seriously hurt the economy in many ways.
I think you guys are reaching a bit, but heck, anything's possible.
Consider that Amazon probably had revenues in the neighborhood of $20 billion last year. By contrast Netflix was around 1/10th of that amount. Amazon is definitely in a position to absorb a certain degree of fluctuations in shipping costs.
In any case, I think competition is good for the consumer, and anything that forces Netflix to improve, and expand, on their product is a good thing.
Truth be told though, I do believe that Amazon is in the driver's seat with regard to streaming video, it may take some time, but I believe they will be a very serious threat to Netflix's only
business come a few years down the road when Netflix has all but discontinued their disc rental by mail business. Maybe that decision will be looked at again with the pressure from Amazon and others, also good for us consumers as disc rental options appear to be coming scarcer as the days progress given the dark outlook for Blockbuster, the only other option I'm aware of.