The rest of the dot-com darlings took too long to take on Netflix
Apple watcher 9to5Mac.com reports that Apple
The value of an Apple rental isn't much. The hottest titles fetch just $3.99 for the rental, or $4.99 for the high-def version.
However, this is clearly a way for Apple to gain traction in the booming trend that's drumming up traffic for Hulu and Netflix's online streaming. In its latest quarter, more than 11 million of Netflix's 16.9 million subscribers took advantage of the service's Watch Now streaming service.
If iTunes can win converts to its digital video marketplace, that should also bode well for the company's fledgling Apple TV gadget.
DVD renters are closing up shop around the country, and Coinstar's
Nice shot, Apple -- but someone else is coming on even stronger.
Bang a gong, Amazon
Apple's aiming well, but its bite-sized digital sample is no match for what Amazon.com
Yesterday's Wall Street Journal claims that the leading online retailing is developing a streaming service for movies and television shows. In and of itself, that isn't really much of a surprise. Amazon has had its envious eyes on the Netflix model for years, and its Video on Demand service already offers an iTunes-like selection of streaming or downloadable movies and television shows for individual purchase.
However, Amazon reportedly plans to bundle said service with its Amazon Prime memberships. There are already plenty of people paying Amazon $79 a year for free two-day shipping on any Amazon-stocked item, along with sharply discounted overnight deliveries. If Amazon starts offering streaming content to those Amazon loyalists at no additional cost -- the way Netflix has offered streaming at no additional cost to its subscribers on unlimited disc plans -- it's about to become a major player in digital streaming.
Content is king, but jokers are wild
The challenge for Amazon, of course, is attracting content worth streaming. If all that Amazon can line up is classic television shows and obscure films, it won't make much of a difference.
Netflix is paying big money for desirable streaming content, and cable television provider Comcast's
Amazon can't afford to play it safe -- or cheap -- now.
Thankfully, there are two tailwind gusts working in its favor. For starters, Amazon already has a healthy relationship with studios, as one of the country's leading retailers of movies and television shows on DVD. Studios have to trust that Amazon wouldn't do something that would cost it the outright sale of optical discs.
However, the biggest ace up Amazon's sleeve is that studios are rightfully worried about Netflix. The more dominant Netflix becomes in digital distribution, the easier it gets for CEO Reed Hastings to call the shots in Hollywood.
Netflix expects to close out the year with as many as 19.7 million subscribers, and millions more will be added next year. A studio that fails to play by Netflix's rules will be the equivalent of a movie studio getting blackballed at one of the largest multiplex chains. Every music label dreads Apple's power through iTunes. The same thing is happening to Netflix, so it's in Hollywood's best interest if Amazon and Apple become the service's worthy competitors.
Don't be surprised if studios go out of their way to make sure that Amazon, Apple, Redbox, and even Wal-Mart
Perhaps they're already too late, and Netflix is already too big. Still, Apple and Amazon won't know whether they have what it takes until they give it a shot.
Which rival offering makes Netflix the most vulnerable? Share your thoughts in the comment box below.
Wal-Mart Stores is a Motley Fool Inside Value pick. Apple, Amazon.com, and Netflix are Motley Fool Stock Advisor recommendations. Wal-Mart Stores is a Motley Fool Global Gains pick. The Fool owns shares of Apple, and Wal-Mart Stores. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.
Longtime Fool contributor Rick Munarriz has been a Netflix shareholder -- and subscriber -- since 2002. Rick is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.
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