Peter Kafka

Recent Posts by Peter Kafka

Netflix Killer? Try Netflix Promoter: Amazon Talks Up a Rival Video Service.

If you were looking for another reason to be bearish about Netflix, Amazon helped out yesterday, by unveiling a cheap, attractive tablet designed to work with Amazon’s own video service.

But here’s a reason to be bullish (or just less bearish) about Netflix: Amazon’s new tablet is also going to promote Netflix.

The video service is one of four big developers — along with Pandora, Facebook and Twitter — that should have apps ready for the Kindle Fire at launch, Amazon has said over and over again.

Here, in this Bloomberg Businessweek curtain-raiser, for instance. And throughout yesterday’s press event, like during my interview with Kindle content boss Russ Grandinetti.

Why would Amazon welcome Netflix when it’s building a competing video service? That one’s easy: Because even after all the blowback, lots of people like Netflix.

Reed Hastings and company should have 24 million customers at the end of this quarter, and 22 million of them will be streaming video. If you’re trying to sell a new gadget, you want to make sure you can include those folks as potential customers, by making sure they can use the service they like after they give you $200.

There’s also a larger question about how directly the Amazon video service will end up competing with Netflix, anyway. The two services seem similar enough at first glance, but lots of smart folks seem to think Amazon is most interested in using its service as an incentive to sign up for Amazon Prime, its express shipping service.

That is: Amazon wants to use digital video to sell physical goods, while Netflix wants to be in the digital video business, period.

In the video industry, Amazon has a rep for being unwilling to pay top dollar for content. For now, at least, it seems instead satisfied to fill its virtual shelves with not just old stuff, but very old stuff — stuff that’s from shows that don’t appear on TV at all anymore.

Netflix has plenty of that stuff, too, but it has has recently made a point of paying up for much fresher stuff — like episodes of “Mad Men” — and stuff that’s so fresh it hasn’t aired yet, like Kevin Spacey’s “House of Cards.”

To be fair, Amazon’s aims could change. It could happen over time, as it cobbles together enough assets and subscribers to make a real run at Netflix. Or it could be overnight: The company is one of the handful of serious bidders still looking at Hulu, and if it landed that service, things could get very interesting very fast.

But for now, Amazon is going to have enough work convincing people who’ve spent a lot of time and money on Apple’s platform to switch to its own cloud service. No reason to make it harder by pissing off millions of Netflix customers, too.

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There was a worry before I started this that I was going to burn every bridge I had. But I realize now that there are some bridges that are worth burning.

— Valleywag editor Sam Biddle