The tricky business of streaming video: Amazon Instant Video or Netflix?
Disruptive technology is a hell of a thing. And with it always come at least a few haters, so because Netflix—much like the Apple iTunes Store—upstaged the existing business model, there is no shortage of companies hating on Netflix.
The battle between Hollywood and Netflix has been going on for several years now, and for the most part, consumers haven't been too sympathetic to Hollywood's plight. And understandably, because for years they've been getting the shaft, either directly from Hollywood through increased ticket prices or indirectly through one of their many favored champion companies, like Blockbuster. Ironically, cable companies—which were at one time considered potential game changers—are now in alignment with Hollywood honchos.
Cable subscriptions are expensive, inflexible, and, frankly, outdated. People no longer see the value to paying for bundles that include channels they don't even watch, and the idea of having to be in front of the television at a specific time to catch a favorite show, all while being forced to sit through commercials, feels unnecessary and inconvenient. The numbers reflect this shift—3 million cable subscribers have "cut the cord" and left in favor of cheaper streaming services. 
Hollywood refuses to accept change and continues to support archaic legislative measures like SOPA/PIPA. Netflix, one of the first new media companies to make extensive use of the Internet, essentially broke the back of a highly successful near-monopoly called Blockbuster—mainly because Blockbuster, like Hollywood today, refused to move with the times—and is now having to face a more unified opposition. The cable companies and Hollywood, who really don't like each other much, have finally found someone they can hate even more.
Currently, and despite recent missteps, Netflix is the largest player in the video streaming space, but its list of competitors is growing, and those competitors are fiercer than ever. Last year, Amazon debuted its 'Instant Video' service, an extra perk for Amazon Prime members. At first, the sparse selection was its largest criticism, but a recent deal with Epix added 3,000 titles to Amazon's library, including some of Netflix's popular titles that were exclusive until the company's two-year contract with Epix ended this month. This deal makes Amazon's streaming service a much more worthy foe, and with its lower price, it could actually pose a threat—eventually.
As far as selection, both services have some popular titles, but due to the increasing cost of licensing fees, the majority of offerings are either no-name or at least several years old. Amazon claims to have more than 25,000 titles in its library, but in this figure, each episode of a series is counted as one "title," making its selection sound a lot more impressive than it actually is. In April, Fast Company estimated that the real number was closer to 1,745 movies and 150 television series. Amazon appreciates what at one time was called "funny math," and they aren't alone, but unlike Amazon, Netflix does not use those numbers to promote its service. As a matter of fact, the company's website makes no mention at all of how many movies it has.
Like Netflix, Amazon does not offer all of its titles for instant streaming. Rather than renting DVDs by mail, though, members have the option of renting titles online that are not included in the Instant Video service. Users can also download purchased and rented content for offline viewing, and rentals expire either 30 days after downloading or 24 to 48 hours after beginning playback. But while the pay-to-view is a nice option to have, it can make for a confusing experience because the organization of the titles does not make it clear which ones are part of the package and which ones cost extra.
Speaking of user experience, browsing through Amazon's Instant Video selection is very similar to browsing through anything else on Amazon: cluttered and "a nightmare to navigate." The interface and the associated user experience offered by Netflix typically receives positive feedback and makes use of a visual design metaphor that is recognizable and works well on multiple platforms. This means that the Netflix experience is not only visually appealing, but also consistent between different devices, which is becoming more and more critical to many users as they often have multiple mobile devices.
In terms of accessibility, while Amazon Instant Video is available on a lot of widely used devices, it is still missing on a few key platforms where Netflix is already present including TiVo, Apple TV, Nintendo Wii, and the Nook, as well as Android and Windows phones and the iPhone. Amazon has the funding to eventually catch up with Netflix, but a lot of users are going to deal with the frustration of being part of this experiment in the meantime. Basically, Amazon is making an integrated content play, similar to the Apple ecosystem in that the deficiencies of the company's model can be overcome by other areas within the Amazon universe, especially for users who already do a lot of shopping there.
So, where does that leave consumers? On some level consumers are better off because while the market experiences turbulence, there is an opportunity for increased savings and to access more selections. On the downside, as with any industry experiencing growth, the volatility does increase risk, which means that when the powers that be decide who wins the battle for content, there will inevitably be people who will have invested their time and money into the loser. And it's hard to tell who that will be because content is going to become harder and harder to get. Licensing fees are only going to go up for the time being as Hollywood scrambles to hold onto the reins.
In the meantime, consumers should support the model which best fits their lifestyle by voting with their wallets. At the end of the day it really isn't about Netflix or Amazon, but the model which provides the "best" access to content that consumers want to ingest or own within the parameters of their own financial considerations. In this fight, brand loyalty is a fickle thing.
Netflix, thank you for kicking Blockbuster to the curb, but what have you done for me lately?