For TV watchers and> movie buffs who want the latest titles streamed straight to their living room, the options keep growing. And as they do, so does the obvious temptation -- to drop cable service, once and for all.
Just this week, Amazon (AMZN)
The new offering from Amazon competes with Netflix (NFLX),
Amazon's new offering does lower the cost for viewers. Shipping perks aside, the price is about $17 less per year for Prime subscribers than an annual streaming-only membership at Netflix. But it's not likely that this move sounds the death knell for cable or the online rental giant, says Dan Rayburn, a principal analyst with Frost & Sullivan. Like the other sites that offer free streaming, the content is limited. Prime members have access to just 5,000 titles -- less than half of what Netflix offers and most achieve fast transfer via smaller, lower-resolution files that won't look great on your big screen. That means customers are likely to do what they've now done for a few years: Cobble together a mix of free and paid online services in addition to not instead of a traditional cable or satellite package.
Even if you could cut the cable cord, watching online won't always be as cheap as it is today. There's still plenty of free content out there at network web sites and services like Hulu, but companies are increasingly limiting selected content to people willing to pay. "There's always going to be something held back," says Peter Johanns, an associate professor of television-radio at Ithaca College. Comcast (CMCSA),
Meanwhile, most streaming content isn't high-resolution yet. That's fine for a computer monitor, an iPad or a laptop, but lousy for a big-screen TV, says Rayburn. And as anyone who's ever had viewing interrupted by a "loading" or "buffering" message knows, streaming is only as good as your internet access. But perhaps the biggest hurdle for channel surfers is that although web content is pitched as on-demand, there's usually a 24-hour delay between when a broadcast airs and when it turns up online. Football games, the Academy Awards, and the latest punch-line from "The Office" all lose their luster with time. "We don't want to hear at the water cooler what happened," says Michael Pachter, an analyst for equity research firm Wedbush.