Market Overview

Amazon's Offline Videos Threaten The Netflix Empire (AMZN, NFLX)

Amazon (NASDAQ: AMZN) announced that its streaming video service, Prime Instant Video, will be the first to allow users to watch content offline.

First reported by AllThingsD, the deal will give users the option to download select films and TV shows, such as CBS's (NYSE: CBS) Under The Dome or Viacom's (NASDAQ: VIA) SpongeBob SquarePants. Amazon has yet to publish a full list of supported videos, but tens of thousands are promised.

Downloaded shows can be saved for 30 days. Users will have 48 hours to finish watching it once the video is played.

This strategy is similar to the one employed by music services like Spotify. Paid users can listen to music with or without an Internet connect. Now Prime subscribers will have an offline option.

There's just one catch: to take advantage of it, subscribers must purchase a Kindle Fire HD, Kindle Fire HDX or Kindle Fire HDX 8.9".

Related: Amazon Quietly Unveils $229 Kindle Fire HDX, $379 Kindle Fire HDX 8.9"

That requirement may be negligible considering how many millions of Kindle Fire tables have already been sold in the United States. It is the second-most popular tablet behind Apple's (NASDAQ: AAPL) iPad and iPad Mini. Google's (NASDAQ: GOOG) second-generation Nexus 7 could take the lead, but it hasn't happened yet.

Even if the new Kindle Fire flops at retail, Amazon's download options could prove to be detrimental to Netflix (NASDAQ: NFLX), Hulu, Redbox Instant and other online video services. Thus far, none of them have provided an offline viewing option.

While downloads could inspire future Kindle Fire HDX sales, the AllThingsD report indicated that Prime subscribers will be able to download them to a PC as well.

Amazon wants to be able to offer every video offline, but content providers have yet to be persuaded. Until they are, Amazon's competitors may have less to worry about.

If this feature takes off, however, it could help Amazon gain an advantage over Netflix.

Disclosure: At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.

Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at louis(at)benzingapro(dot)com. Follow him @LouisBedigianBZ

Posted-In: AllThingsD Amazon Apple CBS Hulu Kindle Fire HD Kindle Fire HDXTech Best of Benzinga

 

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