Amazon preparing unlimited streaming deal?

Amazon is reportedly set to challenge Netflix’s dominance of online movies by offering an all-you-can-stream package.

After several rumors along those lines (which were slightly muddied by contrasting rumors that Amazon wanted to buy out Netflix), one Engadget reader has produced a screenshot of what appears to be a case of Amazon letting the cat out of the bag.

According to the reader, for a brief period he was presented with the usual options to rent or buy movies on the Amazon site, plus a new option that allowed him to watch titles without charge because:

“Your Amazon Prime membership now includes unlimited, commercial-free, instant streaming of 5,000 movies and TV shows at no additional cost.”

Amazon Prime is the company’s pricing option that allows regular users to pay a single fee and then get free two-day shipping on all items, along with discounts on quicker deliver options.

If the report is true and if Amazon is indeed planning to release such an option, it would actually work out cheaper than Netflix’s own unlimited streaming option: Amazon Prime costs $79 a year, while Netflix’s Watch Instantly works out at $95.88 a year.

In terms of choice, Netflix would have a clear lead: though the exact number isn’t confirmed, its streaming range appears to be around four times as big as the 5,000 mentioned by Amazon. Netflix also offers some titles in HD resolution, whereas the Amazon screenshot and the reader report suggests only standard definition would be available through Amazon streaming (leaving HD to its set-top box service.)

If the Amazon service did take off though, it might be ISPs where the real difference is made. A study last November suggested that during the evening, Netflix streaming was responsible for one-fifth of all data downloaded by US broadband users. It also took the company just one week after its Canadian launch to overtake YouTube as the site responsible for the most data downloaded in that country.

Were Amazon’s unlimited deal to lead to a similar increase, it could lead to further debate about how internet providers can and should deal with the added bandwidth demand.

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