Is Amazon Prime the New Netflix?

In the following video, Motley Fool tech and telecom analyst Andrew Tonner discusses a new report from Morningstar estimating that Amazon.com's (NASDAQ: AMZN  ) Amazon Prime service now has 10 million users and $780 million in revenue. Andrew tells investors just how concerned Netflix (NASDAQ: NFLX  ) should be about this, and whether it can stay ahead of the competition.

Everyone knows Amazon is the big bad wolf in the retail world right now, but at its sky-high valuation, most investors are worried it's the company's share price that will get knocked down instead of its competitors'. The Motley Fool's new premium report will tell you what's driving the company's growth, and fill you in on reasons to buy and reasons to sell Amazon. The report also has you covered with a full year of free analyst updates to keep you informed as the company's story changes, so click here now to read more.


Read/Post Comments (7) | Recommend This Article (3)

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  • Report this Comment On March 19, 2013, at 6:32 AM, ComicInvestor wrote:

    I don't get this. The pundits complain about the limited selection of streaming video that Netflix offers, but fail to point out Amazon's selection is a mere fraction of that. If Amazon Prime didn't offer the free shipping, we wouldn't even bother. It would be more useful if we know how many subscribers were actually using the video service, and if they were cancelling Netflix because of it. I suspect most people use both services.

  • Report this Comment On March 19, 2013, at 8:31 AM, SLUSaintsFan wrote:

    Im not sure how you can really compair Amazon Prime the New Netflix because most who join Amazon Prime probley join for the FREE Two-Day Shipping on millions of items on Amazon or the Free Kindle book to borrow each month from the Kindle Owners' Lending Library.

    Netflix only has the Unlimited instant streaming of thousands of movies and TV shows

  • Report this Comment On March 19, 2013, at 9:17 AM, Secs27 wrote:

    How can you say that shipping is free on amazon. You have to pay $79 per year for the privilege. Why pay for this? Most vendors offer free shipping without having to pay for it, hence free!

    Amazon is a very deceptive company. They constantly engage in bait and switch and their accounting practices are less than honest. Additionally, their prices are no competitive. Try searching on thefind dot com and you'll see just how much of a rip off amazon really is. Netflix and hbo go are far superior when it comes to video. Even Sony's free service called Crackle is better than amazon and its 100% free. That smiley arrow on amazons boxes is symbolic of Bezos laughing at all the moronic people who overpay on his site.

  • Report this Comment On March 19, 2013, at 10:33 AM, fingles3 wrote:

    I see a lot of comments on how bad amazon prime is and how Crackle and Netfilx are better.

    My take is this:

    I bought my wife a Kindle Fire a couple of years ago. With the amazon prime subscription she gets free books and free shipping so we signed up. We were pleasently surprised with the streaming of prime on her kindle. Then they released an app for prime on the Playstation 3, now we watch prime in the living room. The selection for streaming is not as big as netflix but the quality is just as good (maybe minus the recent Disney on netflix). The selection on Crackle frankly sucks although it is free.

    Netflix is a little better but streaming only and costs more.

    Crackle, free but not very good yet on selection or quality.

    Amazon has decent selection quality, free books for kindle, free shipping, and occasional deals on the commerce site. And all of it at less cost than netflix....

    No brainer for me.

  • Report this Comment On March 19, 2013, at 6:10 PM, Jrod81 wrote:

    I'll add a comment to the pro-Amazon side on this. My wife and I were long time Netflix subscribers (long in internet terminology, 2+ years), and then added Amazon Prime a year and a half back. About a month or two later, we dropped Netflix and haven't looked back.

    By literally "buying in" to the Amazon network, my wife enjoys the lending library feature, we both have our shows on Amazon (sufficient and not noticeable selection difference to Netflix for our choices), and the 2-day free shipping.

    Yes, it's $79 for the service, but with the shipping, it significantly improved the Amazon experience. No order minimum versus typical $25 minimum to receive free shipping (no pressure to save things in cart to hit the minimum), and faster turn around. We live on the other end of the country from our family, so the ability to put off a birthday/holiday, and still get a gift there in 2 days for free is almost worth the $79 itself for the number of times we've leveraged that. It really just changes the way my wife & I shop, both being working professionals, not wanting to take time from our days to go to brick & mortar stores.

    I will say this for Netflix, they are back on our radar with the original & exclusive programming (e.g. House of Cards & new season of Arrested Development). We'll more than likely go back for a month or two, watch the original shows and then head back to Amazon-exclusivity. Other than that, I don't truly see a reason to go back for us.

  • Report this Comment On January 19, 2014, at 9:32 PM, BigCity wrote:

    This is a great service and I can't believe all that you get with it. Free shipping, kindle books, plenty of movies. Here's what else I got: http://amzn.to/1dX7la7 - Netflix should be worried.

  • Report this Comment On March 19, 2014, at 2:07 PM, tenaciousdeucer wrote:

    Prime shipping is great if you need shipments below the $35 free shipping threshold and/or you need a lot of 2-day shipping. Otherwise, there is very little value on the shipping side of the offering.

    The Prime Instant Video service is certainly a value add if they have programming you want. It definitely does not compare overall to Netflix in quantity nor quality. There is a reason why they haven't split the streaming service off - it isn't good enough to stand on its own and its currently more valuable as an advertising initiative for the a la carte titles.

    I haven't used the e-book checkout but it seems like a nice value add if you actually use it. Many public libraries offer a similar service that might prove to be a free alternative, however.

    Netflix marketing is much more straightforward. The customer doesn't need a formula to decide if all of the value add from the various aspects is worth it. You either watch a lot of shows on NF or it isn't worth it.

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