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The Enemy Camp

Bewkes is at war against low-margin Web video distributors


The behemoth of e-commerce has a growing video- on-demand business, with more than 75,000 movies and shows to stream. It sells TV episodes for as little as 99 cents; movies can be rented or owned. As streaming becomes more popular, Amazon (AMZN) will likely compete head-to-head with Netflix. Look for a subscription service linked to membership in its Amazon Prime shipping program.


First its DVD-by-mail business crushed Blockbuster (BBI). Now, Netflix (NFLX) is threatening to upend the cable universe with a $7.99 monthly package that lets customers watch thousands of unlimited movies and shows over the Internet on almost any device. Bewkes lets it stream niche series not sold into syndication but says there are no plans to add HBO content to that menu.


Founded in March 2007, Hulu's owners include NBC Universal, News Corp., and Disney. The ad-supported site is popular, with more than 2 billion videos of its hit shows and movies streamed in December. But with 2010 revenues in the $260 million range, according to CEO Jason Kilar, its new $7.99 Hulu Plus premium service may prove key in determining the website's future.


Although devices from its iPads to iPhones fuel sales, Apple (AAPL) is a giant in the online entertainment realm. It's closing in on 10 billion downloads from its App Store and offers everything from movies to magazines via iTunes. But Apple's low-cost à la carte model is a nightmare for content producers, who worry that it will wreck margins and devalue other distribution channels. Other than Fox (NWS) and Disney (DIS), whose largest shareholder is Steve Jobs, few content players are willing to experiment with renting hit shows. Still, it's hard to resist the reach that Apple offers.

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