What Netflix offers Amazon is a highly-regarded service and a substantial audience. This is also known as a brand.
What Amazon offers Netflix is scale and a future. While Netflix is king of the heap in the DVD rental business right now, their future as a streaming company is anything but assured. Such a transition will require massive investment in both infrastructure and brand — and there are a lot of people trying to claim the same market.
I see a three-horse race in the future of subscription media. There will be Apple (iPhonePod/iTunes), Microsoft (Zune/XBox) and a third company that is the consolidation of Amazon, Netflix, Pandora, Rhapsody and/or Tivo. The consolidated company will likely be called Amazon.
- Microsoft scoops up Rhapsody
- Legacy media jumps into the subscription business (via Hulu)