Amazon Should Acquire Netflix - Here's Why | Hacker News Reader

Amazon Should Acquire Netflix - Here's Why

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9 pointsdell900021 comments

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.

The fact that Amazon has a handful and Netflix has 45+/- distribution centers shows how inefficient the USPS mail system has gotten compared to the likes of UPS and FedEx.

Amazing.

I don't understand how that conclusion follows from the data. Amazon and Netflix have totally different shipping patterns and business models. Nobody forced Netflix to use USPS; if UPS/FedEx was better for them I'm sure they'd use them.

I can't _ever_ see Netflix using UPS/FedEx due to the logistics on the shipper side. The mail is already going to your house, so having a movie dropped in your mailbox isn't going to make a difference. However, if Netflix were to use a shipper like UPS or FedEx, then they would need to drive their truck to your house just to drop off a disc. That's ridiculous.

All of these people balking at the high carbon footprints of these companies would have a fucking field day.

Just did a search and found something on what I was talking about: http://blogs.zdnet.com/BTL/?p=5302

Had my facts a little mixed up (it's 43 distribution centers, not in 45 states). Anyway, take it for what you will. :)

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...

His point was that if Amazon has a physical presence in the state it's shipping to, it must charge sales tax in that state.

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).

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...

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=...

Several states are trying to change their tax laws to collect sales tax on Amazon; if they succeed then Amazon can go ahead and buy Netflix.

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.

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.

Plus everyone has a mailbox. Not everyone has the bandwidth to download HD on demand.

Digital distribution will overtake physical media when we can carry the magic one device in our pockets (read: not bloody likely any time soon).

Also, Redbox is booming - and they have 10,000 "physical distribution centers" and don't even carry Blu-ray.

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.

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.

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?

The point of the article is more around the value of the subscription business - particularly in economic down turns. I think the demise of physical discs is a longer term theme... but the demise of purchasing those assets is near term. Netflix helps there.

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

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.

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