Quote:
Originally Posted by fjtorres
They are most likely reading that backwards.
The idea isn't to use low price and ads to undercut Netflix.
(Which won't work for the same reasons Kindle won't be dethroned anytime soon: too many customers, too much content, ever more exclusive content.)
What a standalone Amazon video service would do is use low price (say $3.99 a month) and a decent but not great content library to sell targeted *ads*.
Amazon already makes about a billion a year off advertising on their devices and websites; getting a ton of FireTV sticks out there gives them a chance to double their ad sales. Maybe they do a subscription deal, $6-7 a month vs $50 a year. Or maybe signing up for a year at $7 gets you a "free" FireTV stick.
Netflix has a nice little business but Google has a nice *big* business. Taking even a small slice of Google's ad business is more profitable than taking even a big chunk of Netflix's video business.
If Amazon actually does an ad-supported service (audio and/or video) it will be for the ad money because that is where the big money is.
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I could definitely see them giving away the Fire stick for a 1 year sub to their upcoming video streaming ad-based service.