In the last two years, Amazon and Netflix have caught on to this trend and made tens of thousands of movies and TV episodes instantly available through different kinds of set-top devices: TiVo, Roku, X-Box 360 and various stream-ready TV sets and DVD-players.
Amazon's titles are the kinds of new releases users are most likely to want, but those new releases come with a price. Amazon generally charges $3.99 for each movie streamed, while Netflix subscribers can stream movies free.
"We could populate the site with lots of new releases, but they're very, very expensive," said Netflix spokesman Steve Swasey, who declined to comment on the buyout rumor. "We've chosen to spend more on catalogs and TV episodes so we can continue to be the low-price leader."
Amazon, on the other hand, has demonstrated an ability to lower the prices of books, movies and music by selling at high volume, and might have more bargaining power for big titles than the smaller Netflix.
Amazon's low prices on books -- both the virtual tomes available on its Kindle reading device and the old-fashioned paper kind -- are possible because the company sells enough copies to justify tighter margins. The same could eventually happen with movies and TV episodes.
Amazon also declined to respond to any speculation.
"Adding another business that would essentially cannibalize from the moves they're already trying to make just doesn't make a whole lot of sense," Weinstein said.
"Amazon is ramping up digital distribution very quickly. They've obviously done a good job with e-books, and they're making some progress with music," he said. "So I don't think anyone's that much farther down the road than they are."
The last time an Amazon-Netflix deal was rumored, in June 2007, Netflix's stock price surged 5%, with one analyst predicting Netflix could fetch $1.5 billion if acquired by Amazon. Weinstein thought the price today might be closer to $2 billion.
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david.sarno@latimes.com
