According to BusinessWeek, Amazon.com is revisiting an earlier plan to purchase Netflix. Amazon Unbox has failed to attract download customers with its limited library of Windows Media-based videos, so buying an established atom-based service like Netflix makes sense. Amazon’s model is based on selling and shipping physical objects. By link their customer preferences engine to the Netflix customer database, Amazon could move merchandise.
Customers want their rental DVDs ASAP
Blockbuster’s recent Total Access ad campaign points out a growing weakness in the Netflix business model: customers are now accustomed to renting movies in Internet time - even if that means driving to the local Blockbuster to swap a DVD.
It’s a nice twist, as a few years ago Blockbuster was losing market share to Netflix. Given the pathetic DRM that is baked into purchased video downloads, most e-consumers will choose the DVD over a software media player.
Regardless of the outcome, Amazon, Blockbuster and Netflix each need to counter iTunes’ dominant position in the US video download market. iTunes users seem comfortable with that delivery method.
Tags: Amazon, Apple, businessweek, business_model, DRM, e-commerce, iPod, iTunes, market-share, mobile, strategy, USA, video, windows_media
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