Amazon adds unlimited streaming video to Prime
Amazon added unlimited streaming of more than 5,000 movies and television programs to its U.S. Prime membership at no additional charge. The move created a major new subscription-video competitor with economics based on bundling entertainment into a broader commerce membership.
Historical context
Netflix had rapidly expanded subscription streaming and accumulated roughly 20 million subscribers, while Amazon already operated a transactional video store and a successful shipping membership. Combining those businesses allowed Amazon to enter subscription video without asking existing Prime customers to purchase a separate entertainment plan.
What happened
On February 22, 2011, paid Amazon Prime members gained access to Prime Instant Video within Amazon's existing digital-video service. The $79 annual Prime price remained unchanged, and eligible titles could be streamed on computers and a range of internet-connected televisions, Blu-ray players and set-top boxes.
Consequences
Prime Instant Video introduced a durable alternative to the standalone streaming-subscription model. Bundling video with shipping and other benefits made streaming part of a larger ecosystem strategy and established Amazon as a long-term competitor in subscription video.