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April 15, 2005

Aron sent in this important story: Reuters is reporting that Amazon Eyeing DVD Rental Partnership in U.S.

Amazon.com Inc. has approached online DVD rental service companies, including Blockbuster Inc. and Netflix Inc., to explore a partnership rather than launching its own U.S. DVD rental service, an industry source said on Thursday.

Amazon can dramatically alter the playing field within months of entering the market. Amazon owns the Interent Movie Database with more than 20 million active visitors (imagine a "Buy or Add to Queue" button), and Amazon.com has 47 million paying customers. They are also one of the best online marketers, and a scary company to compete with.

Aron commented on the news:

Holy smokes is all I can say. Will reports of the rumor drive out the official news (much like the TiVo/Netflix deal?) You can bet ppl are placing phone calls.

Blockbuster + Amazon must be a scary thought for Netflix (and its investors. read: me). Blockbuster's only real weakness right now is website execution and reputation. The store advantage is solid and tangible. The big problem I see with that relationship is that both companies are seeking to grow via DVD sales. There could be dispute on that much like how Amazon/ToysRUs ended up having a dispute over the selling of toys.

Netflix's interest don't lie in retail, so there is no conflict there. It also clearly has the current size leadership. Also, I would think that Netflix is more desperate (or should be) to find terms to make this happen simply because of the dangerous combination that Blockbuster + Amazon would pose. Also, Netflix might be a better takeover target later because of their lean operating structure.
you think of the news? Who do you think Amazon will partner with?

Via Hacking NetFlix


Originally posted by mikek from Hacking NetFlix, remediated by yatta on Apr 15, 2005 at 01:55 AM


Comments

Amazon UK already offers an online DVD rental service from £7.99 a month.

Posted by: Imran Ali at April 15, 2005 02:55 AM

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