Amazon.com is ramping up its Video on Demand business of streaming movies and TV shows from the web, this week confirming plans to offer titles in high definition this year. Amazon primarily offers streaming video for purchase or rent. But it is also experimenting with an entirely different business model for video through its Internet Movie Database (IMDb) website. IMDb offers a select number of videos for free — and has signaled it wants to do the same with its entire library of titles.
The twin approaches show that Amazon hasn’t committed itself to a single business model when it comes to streaming video, and is hedging its bets between pay-per-view and ad-supported video. Which model Amazon eventually chooses — rent or purchase, free with ads, or a hybrid of the two — will shape how the retailer takes on its major competitors in the web video market, including Netflix, Apple’s iTunes store, and website Hulu.com.
“Amazon is being smart,” said Matt McRae, vice president of products at Vizio, a consumer electronics company that recently struck a deal to incorporate Amazon Video on Demand into a new line of high-definition TVs. By experimenting with paid and free videos, “they get to see how customers react and what kind of content they prefer,” he said.
Amazon spokesman Drew Herdener said Amazon Video on Demand and IMDb “both are building separate, unique offerings for customers.” He declined to provide additional detail, but said the company is “refining our offerings for customers based on what our customers tell us they want and what we think they will enjoy.”
Companies have embraced an array of pricing models for streaming movies and TV shows. Netflix has a subscription model, offering streaming video only to members. Apple’s iTunes store sells videos for use on iPods and other Apple devices. Hulu.com offers free TV episodes and movies, with ads.
Amazon doesn’t break out sales from its web video services. But there are signs that streaming movies and TV shows are finding an audience online. Hulu, a joint venture of NBC Universal and News Corp., is currently ranked the No. 2 top online video brand by web measurement firm Nielsen Online, with more than 308 million video streams in February.
Amazon has been actively developing both sides of its streaming video business. The company has has been incorporating its Video on Demand service, which is stocked with new movie and TV releases, into a variety of television devices, including TV set-top boxes and high-definition TVs.
IMDd.com's free selection includes a lot of TV shows and older movies (many of them from content partners like Hulu), but IMDb founder Col Needham told a film conference this month that the movie trivia website aims to offer a much wider array of movies and other content for free.
Amazon acquired IMDb.com in 1998 for an undisclosed sum.
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