James Delahunty
15 Apr 2005 8:57
Online retailing giant Amazon is reported to be looking to partner with another existing online DVD rental service instead of launching its own fresh service. Amazon has apparently already approached Netflix and Blockbuster but no details on the negotiations were given. Amazon already has its own rental service in the UK which the company launched last year but no companies involved would comment on the new information.
Currently, Netflix is the market leader, consuming about 75% of the overall revenue. After rumours of Amazons plans last year, subscription prices dropped by about 20% as Netflix and Blockbuster went head to head to battle for customers. Netflix CEO Reed Hastings believes the company is about the break even this year and hoping to add nearly 1 million more subscribers by the end of the year.
Currently Netflix has about 3 million subscribers keeping the service alive and successful. Hastings said that Amazon would have to spend a lot of money, in the area of hundreds of millions of dollars just to catch up with Netflix. Amazon however has 47 million customer accounts and believes it can use these accounts as its base to start a new service quickly without having to spend too much money.
Source:
Betanews