Is Amazon Planning An Unlimited Video Streaming Service For Prime Subscribers To Compete With Netflix Watch Instantly?

Looks like Netflix might be getting some fierce competition.

Despite the popular red-enveloped rental company helping to bring the downfall of Blockbuster and Hollywood Video and essentially monopolizing the DVD rental market, the future of digital streaming is still very much up in the air. As DVD and Blu-ray sales continue to decline, the fight to secure a claim in that streaming future is only going to become more and more aggressive. Amazon has already thrown its hat into the ring by amassing a huge selection for its Video on Demand service. But it has failed to pose much of a threat to Netflix's Watch Instantly service, which offers a great many movies and TV shows at a fixed monthly rate, and greater convenience and ease of use to boot. Before long though, all that may change. Learn why after the break.

In what was presumably a mistake on Amazon's part, a reader over at Engadget discovered their Prime subscription had been affixed with an unlimited streaming service for select films, with a description of the upgrade reading simply, "Your Amazon Prime membership now includes unlimited, commercial-free, instant streaming of 5,000 movies and TV shows at no additional cost."

The upgrade was promptly removed, but it seems safe to assume that Amazon is planning something substantial for the future. Specifics of what the service could entail were scarce — according to the article, video resolution is currently limited to 480p Standard Def — though there was apparently a lot of crossover in Amazon's and Netflix's viewing selection (see examples).

When compared to Netflix, the two standout perks are cheaper pricing and retailer-specific membership benefits. Even with Netflix's no frills Watch Instantly-only option, the annual cost comes out at $17 less for Amazon Prime. (About $96 for Netflix vs. $79 for Prime.) On top of that, Amazon Prime offers free shipping on products, meaning that for those who use Amazon regularly, you would be getting two services for the price of one.

Despite any potential limitations, when taken into account with the additional incentives that such a service could provide, this is a deal that may be hard to resist. Netflix may finally have a worthy competitor. (Sorry, Hulu Plus.)