Amazon.com, the largest U.S. online retailer has rolled out its first ever streaming TV and movie service for its prime customers, a move that takes its revenue direction along collision course with rival Netflix.
The world’s leading online retailer announced on Tuesday that it will start offering both on-demand video streaming over the internet, including flat rate online video rental.
It added that its prime customers, who pay $79 a year for free two-day shipping, can choose among 5,000 TV shows and movies to stream through computers and devices such as Roku.
Meanwhile, Netflix, which was established in 1997 and has pioneered its subscription service in 1999, has been offering a collection of 100,000 titles on DVD and surpassing 10 million subscribers.
But the news about Amazon’s planned roll-out was met with less enthusiasm in the trading market both companies posted drop in shares. Netflix shares fell 4 percent in opening trade on Tuesday while shares of Amazon were down 2.6 percent.
The move likewise heightens the battle among Netflix, Apple, Google and Microsoft, which are all eyeing to gain upperhand in controlling the living room by letting consumers watch TV and movies directly from the Internet to TVs and other devices such as tablet computers.
Similarly, the same companies are trying to woo media conglomerates such as Time Warner, Walt Disney, News Corp, Viacom and CBS in order to tap their TV programs and movies. Netflix, traditionally associated with delivering its customers movies and TV shows through the mail in bright red envelopes, is shifting toward streaming video.