Amazon offers free movies to Prime members

NEW YORK - Online shoppers subscribing to Amazon.com's premium membership are getting a new entertainment feature that will allow them to watch movies over the Internet, just as they can through Netflix's rapidly growing video subscription service.

Amazon.com Inc.'s Prime membership charges $79 annually for free two-day shipping and low-cost next-day shipping. Beginning last week, the millions of people subscribing to the Prime service also can watch roughly 5,700 movies and television shows through Amazon's on-demand video service at no additional charge.

The selection will include a mix of movies and TV shows, such as "The Girl with the Dragon Tattoo" trilogy, the documentary "March of the Penguins" and the 1970s British comedy series "Fawlty Towers." All of those titles also are available through Netflix Inc.'s much larger online video library, which offers more than 20,000 movies and TV shows.

Amazon's expansion into video streaming still poses a threat to Netflix, which now has 20 million subscribers.

The competition from a deep-pocketed rival such as Amazon could make it more difficult for Netflix to attract and retain subscribers looking to save money. Netflix offers a streaming-only service that costs $8 per month, or $96 annually, but most of its subscribers pay more so they also can receive some DVD-by-mail rentals. Netflix's most popular combination plans cost $10 to $20 per month.

With another bidder in the video-streaming market, movie studios may be able to demand more money for the licensing rights. That could raise Netflix's expenses and lower it

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