Amazon is one of my favorite companies. They do almost everything right, and are extremely innovative. They don't just capture markets--they make markets. What started as an online bookstore has become the best place to buy almost anything. I have purchased Keurig K-Cups, Popchips, toothpaste, pet supplies, video games, and over 500 other things from Amazon over the years. They also have an incredibly cloud computing system, and Amazon was responsible for the boom of ebook readers with the Kindle. You can even buy DRM-free MP3s on Amazon for less than what iTunes charges, and they import into iTunes automagically. Where I think Amazon is making a big mistake, however, is with their Video On Demand (VOD) service. This is another market looking for a king, particularly on portable devices, and Amazon is wasting a big opportunity.
I have an iPad. It is great for so many things, but one "killer app" involves the luxury of watching television and movies on the go. iTunes makes this easy, allowing you to download content to your device and watch it whenever you want. Netflix makes this easy as well, giving anyone with a Netflix account the ability to stream to their device. Even ABC has an application which allows you to watch their shows streamed on demand. Amazon, however, has a silly little pop-up letting me know that "Flash 10 is not installed." I am not trying to fan the flames of the Flash versus HTLM5 versus h.264 encoding debate here. I'm simply saying it is outrageous for a company of Amazon's size to have all their eggs in one archaic basket. What it comes down to is there is a huge empty crater in the market, and I think Amazon should fill it.
The Huge Empty Crater In the Market
Nobody has a subscription service that allows you to download content for later viewing. iTunes lets you pay-per-download and watch whenever you want. Netflix lets you pay a fixed subscription fee and stream from a portion of their library. Amazon lets you pay per download and watch later, if you have Flash. But somebody needs to put Netflix and iTunes in a blender and spit out a new service that lets us pay a monthly fee for access to downloadable content. I understand that there would have to be hooks and triggers governing DRM and I'm fine with that. Delete it after I'm done watching it, delete it after a week or two, whatever you need to do to satisfy intellectual property holders and make a profit. But someone should do it, because there's a huge demand for it, and each existing solution has its flaws.
Netflix, in addition to being stream-only which requires a high-speed internet connection to use, has a limited library. New arrivals lag behind, and many shows aren't in the VOD library. I was talking to my son about Superman and Smallville, and decided to find out how I could show him Smallville on my iPad. Unfortunately it is only available by snail-mail DVDs. I'm sure there's some fancy business model stuff going on behind the scenes that determines which content is available on VOD and which isn't, but that should also mean there's a pricepoint that makes all content available.
iTunes, on the other hand, is a pay-for-what-you-want service. I use it frequently, but always feel a bit dirty about paying $1.99 for a TV episode when I can rent a movie for $3.99. Especially when it is a 30 minute show that is actually only about 22 minutes. Typically I only ever do this to catch up on a show I like if I miss an episode, although that's not very often since I use a Tivo. The other problem with iTunes is that it cycles shows out of its library for some reason. Again, using Smallville as an example, only seasons 1, 2, 3, 8, and 9 are available. Why not seasons 4, 5, 6 and 7? What if someone wants to watch them all? Did Apple run out of diskspace to store shows? I know they were there before, so what criteria do they use to pull shows from their library?
Amazon has Smallville. They have every season. I could buy individual episodes or entire seasons. I can watch them all using their VOD service. Unfortunately their service requires Flash to work, which isn't on iPads or iPhones. It also is a pay-for-what-you-want service, and isn't subscription based. Apparently Amazon, unlike Apple, has enough diskspace to store shows, they simply have a limited distribution model. I don't want to sit at my desk and watch Smallville on my computer. If I'm going to watch something at home, I'll watch it on one of my really big TVs, not on my relatively small computer screen. If I'm on the road I could always bring my laptop, but why have to lug along an extra device?
Amazon: Wake Up and Dominate
Take your big library, build a subscription model, and improve your distribution. Allow storage of content for offline viewing, and control it however you'd like. Give us an iPad app, or integrate it into your existing Amazon iPad app. With your computing power you could probably encode everything in h.264 overnight. With your buying and negotiating power, you could probably price it all better than Netflix with a library way better than the one in iTunes. So what are you waiting for? Go make the subscription download video market happen! If you don't do it, someone else will, and I'll be back on here shouting about how wonderful it is.