Amazon may be looking to cut into Netflix's action by launching a new video streaming service.
Amazon's Instant Video is free with a $79 Amazon Prime subscription, though nonsubscribers can buy or rent individual movies and TV episodes on a per-title basis. In contrast, the new service would borrow a page from Netflix's business model. Amazon is just currently trying to figure out what to charge, one source told the Post.
Netflix is even anticipating the new video offering from Amazon.
In a letter (PDF) directed to shareholders yesterday, Netflix said that "we expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours."
But Netflix discounted the potential competition posed by Amazon and by rival Hulu Plus, adding that "both Amazon and Hulu Plus's content is a fraction of our content, and we believe their respective total viewing hours are each less than 10 percent of ours."
But the right time to strike may have already passed. Yesterday, Netflix reported a healthy jump in sales and a 220,000 increase in streaming customers to 21.6 million for the fourth quarter.
Amazon did not immediately respond for CNET's request for comment.