February 22, 2011, 12:20 PM — Today Amazon launched its "Prime Instant Video" service. This is an additional feature added to Amazon's existing $79/year Prime service that offers free two-day shipping on many products. The immediate comparison, of course, is to Netflix's "Watch Instantly" streaming service, so lets compare the two. I tested Amazon Prime on a Roku player.
On price, Amazon has the edge over Netflix, which costs at least $7.99 month, or $95.88/year. Amazon's $79/year includes free two-day shipping on most physical products as well as unlimited streaming. Depending on how much you shop at Amazon, Prime can add up to a significant savings. As a pure streaming service, Amazon saves you about $1.40/month; probably not a determining factor.
For convenience, Netflix wins. Both services are available on Windows and Mac PCs, of course, but Netflix Streaming seems to be on just about every internet-enabled device with a screen. Amazon Video-on-Demand isn't as widely available, but if you have a Roku, Google TV, or an internet-enabled Samsung, Sony, Panasonic or Vizio TV or Blu-ray player that already has Amazon Video-on-Demand you're all set. For some reason Prime Videos aren't available on Tivo models, though Amazon Video-on-Demand is. Most notably, Amazon doesn't offer its streaming service on game consoles; at least not yet.
Also, Amazon doesn't offer any kind of a queue system, nor does it offer suggestions and there's no way to search and get only Prime results. Browsing through offerings can be somewhat tedious and a 'Save for later' option would be most welcome.
The biggest factor, of course, is selection. Netflix wins here on pure numbers, but then Amazon just got started. Netflix is often faulted for not offering many recent movies via streaming, but Amazon seems to be even worse, with very few recent films available. In the television category, Amazon is very heavy on British imports. Doctor Who, Torchwood, Masterpiece Theater imports like Downton Abbey, Primeval, Doc Marten...the "Top TV" section feels like you've just tuned into the BBC. That said, there are shows available on Amazon Prime that aren't available via streaming on Netflix, though you have to look for them and the ones I found weren't going to swing many customers (The First Churchills, Ballykissangel and, hold on to your seats: The Best of Tennessee Tuxedo and his Tales, starring Don Adams as a penguin constantly trying to escape from a zoo with his blundering walrus pal....classic stuff). Depending on your tastes in television, there's going to be plenty here for you to watch...or almost nothing.
Technically, neither service has the edge. Both offer HD streaming (when available) and both work very well in my experience. Historically I've found (paid) Amazon Video-on-Demand content can sometimes seem slightly cleaner when watching during prime time; I've attributed that to bandwidth issues. Amazon just doesn't have the kinds of demands on its service that Netflix does. We'll see if that changes over time, and in any event it's always been a fairly subtle difference and your experience might vary depending on where you are, who your broadband provider is, and so forth.
So checking off the bullet points, Netflix doesn't have anything to fear from Amazon "Prime Instant Video" at this stage of the game. But Amazon has a built-in audience in its existing Prime customers. Personally I've been a Prime member for years and feel that the $79/year is well spent considering how much shopping I do at Amazon. For people like me, Prime Video is just a really nice freebie thrown into an existing worthy service. What's not to like about that? Amazon needs to keep adding newer titles to the service if it wants to compete.
If all you're interested in is streaming video, though, Netflix clearly is still the way to go, in spite of the slightly higher price. Better selection and more convenience win out over $1.40/month savings.