
Amazon Should Acquire Netflix - Here's Why - dell9000
http://ryanspoon.com/blog/2009/01/02/why-amazon-should-acquire-netflix/
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catone
The argument I've always heard against Amazon acquiring Netflix is that
Netflix has distribution centers in something like 45 states, whereas Amazon
only has them in a handful. So that'd be 45 states in which Amazon would then
have to charge sales tax.

If Netflix were a solely streaming operation, it'd make sense for Amazon, or
if tax on ecommerce was already charged in most states regardless of physical
presence it would make sense. Not sure it does otherwise, though.

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antiismist
Amazon seems to charge sales tax based on where the goods are shipped to, not
where they are shipped from:

"Items sold by Amazon.com LLC, or its subsidiaries, and shipped to
destinations in the states of Kansas, Kentucky, New York, North Dakota, or
Washington are subject to tax."

[http://www.amazon.com/gp/help/customer/display.html?nodeId=4...](http://www.amazon.com/gp/help/customer/display.html?nodeId=468512)

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catone
I think those are the states in which they have a physical presence. I know
their headquarters are in Washington, for example, and that they have a big
distribution center in Kentucky. New York, though, may just have laws taxing
ecommerce (I'm not certain).

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antiismist
Nope, Amazon has distribution centers in 8 states, but they don't all get
sales taxed:

[http://en.wikipedia.org/wiki/Amazon.com#Fulfillment_and_ware...](http://en.wikipedia.org/wiki/Amazon.com#Fulfillment_and_warehousing)

~~~
catone
I guess it would depend on the sales tax laws in each state.

Some states require sales tax on ecommerce if there is a physical presence,
some do not. Some require tax regardless.

The argument I have always heard in relation to Netflix is that if Amazon were
to acquire Netflix it would mean charging sale tax to a much greater number of
customers.

Netflix has many more established physical presences across the US:
[http://www.listology.com/netflix_tracker_reports.cfm?report=...](http://www.listology.com/netflix_tracker_reports.cfm?report=centers)

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jonknee
Netflix and Amazon know the days of physical discs are numbered. I don't think
Amazon needs to acquire a business to dominate a dying vertical. They already
have digital distribution and a huge brand, just bank on that.

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inklesspen
The days of physical discs will last for quite a while. First Amazon would
have to provide a TV-centric solution that matches Bluray's power, and then
they will have to provide a drm-free solution so buyers aren't tied to Windows
Media.

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jonknee
Why would it have to be DRM free? DVD and Blu-Ray are riddled with DRM and
they are still popular. This is to do "rental", not purchasing. Only makes
sense to have some DRM on there or else the purchase business will end.

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inklesspen
Depends on the form of DRM, really. DVD's DRM doesn't bother most people,
because it doesn't really pose an obstacle to what they want to do with it.
But Windows Media DRM won't work nicely with set-top boxes, with Macs, perhaps
even with Microsoft's own products (remember Zune not working with
PlaysForSure?). And there have been well-known cases of Windows Media DRM
servers going dark. The DRM the movie cartels insist on for digital downloads
is just too intrusive.

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jonknee
Amazon does video on demand to Macs, PCs, XBOX, Tivo, etc. Who cares if DRM
servers go dark, this is a streaming service. You watch it and then Microsoft
could be fire bombed and it doesn't affect you.

I agree DRM is shitty for purchased movies, but this is basically a pay-per-
view service. For most movies that's all people want. Why wait for the mail
man or go to a store/kiosk when you can watch instantly from your couch?

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hs
i guess the reason amazon doesn't have many distribution centers is because
they are expensive

she outsourced the problem by having amazon marketplace

now every kindle is distribution center (cheap)

looking at this trend, she might be better off creating a kindle for movies

her strength is not in rental (why safari bookshelf is unchallenged ?)

if she _really_ want to be in movie rental, maybe safari dvd-rack model
(download high-res per dvd chapter or streaming lower res for full, 3
titles/rack/mo) is a long shot

the success of youtube indicates that not everyone cares about dvd-quality
clips, they simply want to watch it now

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asnyder
Could it be that the larger iPod Touch will be the new kindle for movies? If
and when our bandwidth catches up to our foreign counterparts, renting movies
via the embedded iTunes app will seem natural enough.

However, unlike books, movies are best experienced in an environment dedicated
to it. So even if the iPod Touch is the next kindle for movies, something like
Apple TV, or the numerous netflix set top boxes will most likely be the next
step in movie rentals and purchasing.

