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Amazon goes offline with digital video downloads

7:21 AM, Sep 27, 2013   |    comments
Amazon founder Jeff Bezos (Photo by Spencer Platt/Getty Images)
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SAN FRANCISCO -- Amazon is stirring things up again in the media industry.

The world's largest Internet retailer re-defined book reading and purchasing with its Kindle e-readers. Now the company is pushing the boundaries of video distribution and consumption.

Amazon Chief Executive Jeff Bezos unveiled two new Kindle Fire HDX tablets and one updated Fire HD model Wednesday to compete with Apple's dominant iPad. The new devices let subscribers of Amazon's Prime Instant Video service download movies and TV shows to watch offline, making it the only online streaming subscription service to offer this feature.

Most downloads last for 30 days and once viewers start watching the videos they expirein 48 hours. Previously you could only stream these videos, so the subscription service was only available to most users through a Wifi connection.

The download feature is a typical consumer-friendly move by Amazon, which is known to keep prices low - often at the expense of short-term profits.

"It's a feature that will appeal to travelers and parents with young children," said Sarah Rotman Epps, an analyst at Forrester Research.

It's also a way to encourage more people to sign up for Amazon's Prime service, a major source of revenue growth and profit for Amazon, she added.

Prime costs $79 a year in the U.S. and offers free two-day shipping on most products for sale on Amazon.com. Prime subscribers also get free access to Prime Instant Video, which has more than 40,000 videos and competes with Netflix and Hulu.

But the media industry may not be happy with Amazon's new download feature.

"It diminishes the desire to buy video content because you can rent it and now even have access to the rental offline," said Richard Greenfield, an analyst at BTIG. "Not everyone in the media industry is going to love this idea."

Not all Prime Instant Videos can be downloaded. Amazon said "tens of thousands" of these videos are available for download on the new Fire tablets.

"Our goal is to make this available for all Prime Instant Video titles," said Amazon spokeswoman Kinley Pearsall. "Availability is based on the studio or network and we work closely with them to make titles available for download."

The feature is not available on older Kindle Fire tablets, but Pearsall hinted that this may change. "We have a long history of bringing new features to previous devices when possible," she said.

Amazon is paying more for the ability to allow downloads because this is another, new way for viewers to consume more video, according to a person at a major media company that already works with the Internet retailer. The person did not want to be identified because the details of partnerships with Amazon are private.

"The media industry will have to decide," said Laura Martin, senior media analyst at Needham. "If a media company thinks this is adding a lot more value to Amazon's service then they will charge more."

Amazon's Pearsall said the company does not discuss business relationships.

Despite reluctance on the part of some media companies, features such as downloads from video subscription services are the future, Greenfield said.

Google's YouTube is preparing to introduce a new feature in its mobile apps that will enable videos to be downloaded onto devices for offline viewing. That service is scheduled to launch in November.

Alistair Barr, USA TODAY

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