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How Netflix Can Stop Amazon Prime From Taking Over Its Movie Streaming Business

Amazon (AMZN) Prime movie streaming went live this morning, which adds another online movie adversary to Netflix. It offers more than 5,000 movies and TV programs, all of which can be streamed or purchased for download. According to Engadget, the movie streaming is only available in America. Amazon Prime streaming is pretty limited at launch, which gives Netflix an opportunity to protect its market share before the service gains some real momentum.

Launch in more countries
Last fall Netflix successfully launched movie streaming in Canada with more than 7,000 shows available -- and while Netflix hasn't released the number of streaming shows in America, anecdotal evidence says that the amount available in Canada is a fraction of it. Furthermore, the average Canadian has download caps that limit how much he or she can stream, potentially crimping a service like Netflix even further.

Despite these two limitations, Netflix Canada was still a success: A report found that 10 percent of all Canadians visited the Netflix website within its first week. It proves that even a limited launch in other countries could work for Netflix. The company should spread as quickly as possible before Amazon Prime does the same.

Allow customers to actually buy movies
Amazon Prime customers can get their product virtually any way they like:

  • Stream the video for no extra charge
  • Purchase the digital video and download it
  • Buy the DVD/Blu-Ray and have it shipped home
Netflix customers can only do one thing: Watch the video online. One big hole in Netflix's system is that users have no way to actually own a program they like. They can technically watch it anytime online, but, because of Netflix's limited license agreements with content providers, a program that's available one week might have disappeared the next.

Netflix should allow customers to actually buy movies they like as digital downloads or even as DVD or Blu-Ray disks. Adding movie sales to the current unlimited streaming buffet would help the bottom line. It also could appease content providers that feel like they aren't making enough money on the Netflix model.

Photo courtesy of Amazon
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