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Originally Posted by sylar
fwiw, with any online and/or streaming service, the biggest obstacle is not cost or storage or bandwidth. there are technology companies and technology groups within companies that have worked and improved those aspects for decades, and they only get cheaper with time and with your customer base.
Oh, yeah that def makes sense - sorry my post above may not have brought out the point I was trying to make about AMZN owning their CDN - it'll be cheaper for Amazon to handle the technology/provisioning piece vs. Netflix (who has to pay outside 3rd party vendors).
So what that suggest is Amazon will have more money to spend on content, or pass the savings onto their subscribers in some way - so good positioning v. Netflix.
But one thing I think I'd disagree with you on - the biggest obstacle for online/OTT content distributors will be cost - not in the form of technology costs, but in the form of content licensing fees. The only thing that matters to the consumer for a video service is what content you have for them, and at what price. Netflix is already facing margin pressures, and will face more as they have to spend more for their content licenses.
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the biggest obstacle is loyalty. it is relatively easy to drop the netflix subscription in favor of a "free" service. unless that subscription comes with some other benefit.
Again, think it's really about the content the distributor has rights to. Netflix has great brand value, but if they can't lock up content rights they have today of course, they are done. And you couldn't drop Netflix today for Amazon Instant, because the library Amazon has is pretty weak.
But if Amazon over time gets a competitive content offering to Netflix, and (to your point) it's basically a "free" service to Prime members (if they keep the sub model the same as today), Netflix could def lose some subs...
Interestingly (and also I believe to your point) - one concept that gets thrown about alot in content distribution circles (lol this exists, I swear) - is the "good enough" phenomenon. It's the point where price point meets content availability to trigger a subscription. Netflix has found a "good enough" sweet spot - where Amazon Instant's good enough sweet spot will be is interesting considering their service is essentially "free" to Prime members.
And however this plays out, as mentioned above - happy to see Amazon in the game.
-Al
Last edited by Aloysius; 02-23-2011 at 06:28 PM.