Amazon seen as 'potential Netflix killer'

Netflix (Nasdaq: NFLX), so far unscathed by competition from Hulu and Dish Network (Nasdaq: DISH),  is hardly running free and alone in the online video streaming service space.

That's because, "Amazon.com (Nasdaq: AMZN) is the potential Netflix killer," CNET senior writer and analyst Greg Sandoval said in a story covered by CNBC.com.

Amazon comes to war armed with its Prime Streaming service that, besides streaming videos over the Internet, offers free two-day shipping for any Amazon.com order that comes to the residence in a truck, not a wire. Since these deals extend to Amazon's entire product portfolio, they present a good reason for even the occasional Amazon shopper to sign up for the streaming service, Sandoval posits.

Netflix, meanwhile, has been gathering a lot of not necessarily positive attention as it "celebrates" the one year anniversary of what some still consider a suicidal move: raising prices for DVD and video access by 60 percent and killing a hybrid subscription plan. That move is still being punished on Wall Street, where Netflix stock has dropped more than 70 percent even as the company has racked up impressive viewing numbers and 26.5 million subscribers.

Sandoval laid blame for the move at the feet of Netflix founder and CEO Reed Hastings who, he said, is a "smart guy" but who "didn't believe in DVDs anymore. He was looking to push the company into streaming. He believed the timing was right but he didn't take it to his customers."

The fact that Netflix lost 800,000 customers after the move gives Sandoval some room to criticize. The fact that many Hollywood film studios pulled away from the streaming service after it raised prices, while damaging, isn't as serious, Sandoval argued, because "you have fights between the TV guys and the home entertainment guys, and a lot of times decisions are made on whoever prevails."

It could be, he said, that Netflix will prevail—even in light of Amazon's up-and-coming competitive status. For now, anyway, Netflix seems to be safely in the online video streaming catbird's seat.

"I don't think you should count out Netflix," he said. "Nobody's gonna take them in a year."

Next year—and the year after that--well, that's another matter.

"Amazon is the company that Netflix should be worrying about," he concluded.

For more:
 - see the CNBC story

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