After almost four weeks of speculation, Amazon rolled out their unlimited video on demand service for Prime members. According to the announcement, Amazon Prime members, who already enjoy free two day shipping for a $79 flat annual fee, will now have unlimited access to 5,000 streaming movies and television shows. The move was initially viewed as a direct attack at video streaming service Netflix, which offers similar services at $8/month for unlimited access.
Consumption of video content is primarily conducted on the web. According to a recent report by Nielsen on video consumption, usage in January in the U.S. is up considerably from the same time last year as time spent viewing video on PC/Mac/laptops from home and work locations increased by 45%. And Netflix users on average spend 11 minutes watching videos, which is more than double the amount of time spent by Hulu subscribers.
When considering these numbers, it is clear to see that video on demand services are an integral component of next generation TV or interactive TV (iTV). This begs the question: how will Amazon’s service impact Netflix? To best answer this question, one may want to look at a few factors:
The desktop search engine industry has been awfully quiet lately. Just looking at the search volume in Google Trends reveals that there’s been little positive change in the past 12 months (see chart below). But early this week, everything suddenly changed as the two search engine giants got into a fight over Google calling out Bing for copying their search results. In summary, Google baited Bing by creating illogical search results for “synthetic” queries (aka nonsense terms). Google recruited 20 engineers with Suggested Sites in Internet Explorer 8 and had them search for these fake term in Google until the results showed up in Bing (about 2 weeks!). The next day Microsoft fired back at Google explaining that the algorithm to prioritize search results uses multiple “signals” along with collective intelligence to determine search quality and in this case Google simply exposed this flaw. In essence, the flaw suggests that Microsoft considers Google to be the authoritative source whenever the result set is limited.
While there is no denying that Bing autogenerated the same results as Google, there are two important lessons that technologists and marketers should learn from this fight: