Please ensure Javascript is enabled for purposes of website accessibility

Amazon's Latest Delivery: Video on Demand

By Anders Bylund – Updated Apr 5, 2017 at 8:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Will a lack of tedious downloads draw throngs of curious entertainment consumers?

Amazon.com (NASDAQ:AMZN) has already dabbled in video downloads with its Unbox TV episode and movie store. Now the company kicks its video efforts into high gear with a slick streaming service.

The skeptics out there might ask, "What's the big deal? Couldn't we just download stuff from Unbox and be happy?" Well, the mythical American consumer (cursor curiosus, a nervous member of the family Sciuridae) likes instant gratification, which explains why Google's (NASDAQ:GOOG) YouTube draws such a crowd: Click a thumbnail, and the video starts playing immediately. No need to wait for a long, boring download.

So Amazon's Video On Demand now delivers immediate satisfaction through multiple channels, replacing Unbox's download-based model. A Microsoft (NASDAQ:MSFT) Windows PC or Apple (NASDAQ:AAPL) Mac will play these videos equally well, as will your TiVo (NASDAQ:TIVO), your Xbox 360, or any gadget you own with Adobe (NASDAQ:ADBE) Flash support. Yes, that includes that spiffy new Google browser.

Amazon's content library looks fresh, with 40,000 titles under its belt. Most of that consists of single episodes of popular TV shows, at $1.99 a pop (a dime less per episode for a full-season "TV pass"). But you can also rent some 6,300 full-length movies, or buy permanent viewing rights for more than 8,000 movies. Rentals usually cost $3.99 per 24 hours, which is roughly comparable to renting a new release on demand through my Verizon (NYSE:VZ) FiOS service, though some older or smaller-budget flicks can be had for a week for $2.99. The full-on purchases tend to range from about $4.99 (Terminator 2) to $14.99 (Superbad).

The convenience factor is hard to match, as Amazon tacks a YouTube-esque user experience onto much longer material. Some of it is free (and devoid of commercial breaks), but most of these streams are clearly monetized. Check back in late October when Amazon reports earnings again, and we'll see how this experiment works out. Amazon holds one advantage that free, ad-supported Hulu -- its main rival in this niche of the video market, featuring many of the same TV series -- can't match: a well-known brand name. I have a feeling that Mr. Bezos is onto something good here.

Further Foolishness:

Microsoft is a Motley Fool Inside Value recommendation. Google is a Motley Fool Rule Breakers selection. Amazon.com and Apple are Motley Fool Stock Advisor recommendations. Try any of our Foolish newsletters services free for 30 days.

Fool contributor Anders Bylund owns a few Google shares but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like. Foolish disclosure runs on equal parts caffeine and Ritalin.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$113.78 (-3.01%) $-3.53
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$237.92 (-1.27%) $-3.06
Alphabet Inc. Stock Quote
Alphabet Inc.
GOOGL
$98.74 (-1.40%) $-1.40
Apple Inc. Stock Quote
Apple Inc.
AAPL
$150.43 (-1.51%) $-2.31
Verizon Communications Inc. Stock Quote
Verizon Communications Inc.
VZ
$39.52 (-1.03%) $0.41
Adobe Inc. Stock Quote
Adobe Inc.
ADBE
$284.56 (-0.87%) $-2.50
TiVo Corporation Stock Quote
TiVo Corporation
TIVO

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.