Good news for Amazon Prime members: Amazon.com has signed a deal with Viacom that gives its Amazon Prime Instant Video service access to a lot more stuff–from Jersey Shore to Dora the Explorer. It now offers more than 15,000 streaming videos to Prime members at no additional charge.

Netflix seems to be shy about disclosing the number of streaming videos it has–its FAQ just says “thousands”–but Roku’s site says it’s “over 20,000″ and I’ve also seen a figure of 25,000 quoted. In either case, Amazon Prime, which started out a year ago with just 5,000 titles, appears to be closing in.

But Amazon still isn’t quite marketing it as a Netflix archival. The video streaming is a freebie for those of us who pay $79 for discounted shipping of physical products, not a standalone service with a standalone price tag. That lets it float under the radar and makes it sound like a bountiful bonus rather than a skimpy selection.

My guess is that at some point, Amazon will start treating Prime Instant Video like it wants to take on Netflix in a seriously manner. That’ll presumably involve offering it at a similar (or lower?) monthly price.

The logical time to do so is when the catalogs have roughly the same quantity of movies and TV shows. I wonder if it’ll happen by the end of this year?

The future of Netflix is 100% based on its ability to grow into the best streaming video entertainment service. Renting discs is very profitable for Netflix, but it’s the past. That’s why it went as far as to try separating its DVD business last year as “Qwikster,” and that’s why it’s letting studios make DVD rentals less attractive with windows and queue restrictions.

With last year’s Qwikster fiasco, we saw that Netflix is so anxious to exit DVD rentals that it hurts its judgment. It’s never healthy for a company to be in a business it dislikes. I wonder if Netflix has considered just ditching rentals–sooner, not later–rather than hoping that consumers are the ones who do the ditching?

Now, it’s official: Netflix will not rent video games, or at least it has “no plans” to do so, CEO Reed Hastings said in an earnings call. He did not elaborate.

Netflix had planned to rent video games as an optional upgrade for movie renters. The news excited me because both GameFly and Blockbuster have trouble sending out the newest games in a timely manner. I was hoping that Netflix, with its huge DVD operation, would be able to do a better job with new releases, or at least pressure its competitors to do so.

But without a spin-off, it’s no surprise that Netflix doesn’t want to make the investment. That money is better spent on acquiring more streaming content–the inevitable future of media consumption–instead of trying to rent more discs.

It may just be me, but I can’t remember many years as peculiar as 2o11 turned out to be for this business. Even demonstrably gifted and sensible people like Netflix’s Reed Hastings seemed to fall victim to a fever that made them do strange, ill-advised things. I hope that 2012 is a tad less weird, but 2011 has been fascinating to cover, and never, ever boring.

In hallowed Technologizer tradition, it’s time to recap the year in dumb. Celebrities, corporate intrigue, sex, violence–they’re all here. Gird yourself, people: Things are about to get really stupid.

(As always, thanks to Esquire’s iconic Dubious Achievement Awards and Business 2.0′s 101 Dumbest Moments in Business for inspiring this project. Those lists no longer exist, but we soldier on.)

January

1. Stop this woman before she tweets again.

Proceedings begin in a court case charging that rocker Courtney Love defamed fashion designer Dawn “Boudoir Queen” Simorangkir on Twitter and MySpace. A judge eventually rules that Love is guilty. She’s booted off Twitter for more than two months and must pay Simorangkir $430,000. By May, Love is in Twitter legal hot water again–this time over her tweets about her former lawyer.

2. Thrilling! At least if you hated Flock.

Social gaming behemoth Zynga buys pioneering social browser Flock. Shawn Hardin, Flock’s CEO, says he’s “thrilled” by the development. But it’s not until three months later that anyone involved admits that the acquisition is terrible news for Flock fans: the browser is being discontinued.

February

3. Bing sting.

Google injects fake results into search results to confirm its suspicion that Microsoft’s Bing is watching IE users’ Google searches and blending data from the results into Bing results. It publicly accuses Microsoft of cheating; Microsoft responds by mocking Google’s “spy-novelesque stunt.”

4. Penney which way you can.

The New York Times’ David Segal reports that retail relic J.C. Penney’s impressive rankings in Google search results on an array of topics have been goosed by the creation of phantom sites such as bulgariapropertyportal.com, which exist only to be stuffed with links to Penney’s pages. Google promises to take “corrective action” and Penney denies all knowledge.

5. Pity they couldn’t have bided their time until this digital thing blew over.

Once-mighty bookstore chain Borders declares bankruptcy and starts shuttering stores. In July, it announces that it’s going out of business, period. The retailer’s many missteps included refusing to operate its own Web site for years, doubling down on CD sales at the same time that the iPod was changing music forever, and taking e-books far less seriously than its major rivals, Amazon.com and Barnes & Noble.

March

6. But wait–actors are real people too, aren’t they? Aren’t they?

At the CTIA conference in Orlando, Samsung shows videos featuring “real” people heartily endorsing its Galaxy Tab. They’re real, all right–real actors, as I eventually figure out.

7. Good to hear they can take a little criticism.

In the same video presentation, Samsung shows a mock article about the Galaxy Tab from a fake business magazine. The text is cribbed from my not-entirely-positive review of the original Galaxy Tab.

8. $3 billion worth of fail.

AT&T launches a $39 billion bid to acquire T-Mobile USA. The former Ma Bell is apparently pretty darn confident that the deal will go through: It tells T-Mobile that it’ll pay it a $3 billion fee (plus valuable spectrum) if it doesn’t. But both the Justice Department and the FCC hate the merger. In December, AT&T pulls the plug and says that T-Mobile will get its cash and spectrum.

9. In the 1990s, this would have been done with VHS and dial-up modems.

Rather than striking deals with movie companies, super-genius startup Zediva’s new streaming service takes advantage of what its founders think is a legal loophole: It involves DVDs and banks of Internet-connected DVD players. Oddly enough, Hollywood is nonplussed. In August, a judge closes the loophole.

10. Bring me the head of Babar the First.

Bob Parsons, founder of exuberantly cheesy domain registrar Go Daddy sparks outrage when he shares a video of himself shooting an elephant in Zimbabwe. He says that the pachyderm was a rogue and that starving villagers will benefit from the protein it provides. PETA, oddly enough, isn’t placated.

11. A blow to dupes and patsies everywhere.

Germany-based Auction site Swoopo, which turned bidding into gambling by making users pay a non-refundable fee each time they bid on an item, goes dark as its parent company files for bankruptcy.

April

12. A day or two? Hey, no biggie.

Sony’s PlayStation Network suffers an outage, for unspecified reasons; Sony calmly says it may take “a full day or two” to restore service.

13. Flippin’ ridiculous.

Two years after spending $550 million for Flip camcorder maker Pure Digital–and one day before a new Flip was scheduled to debut–Cisco suddenly loses interest in consumer products and kills the entire Flip line. At the time of its death, it’s the nation’s best-selling camcorder.

14. Apparently he was under the mistaken impression that BBC stood for “BlackBerry Cheerleaders.”

Irritated at questions about BlackBerry security and censorship issues in India and the Middle East, RIM founder and co-CEO Mike Lazaridis abruptly declares that his TV interview with the BBC is over.

15. PrayStation.

Sony says that the PlayStation Network has suffered an “external intrusion” and won’t be back online until it’s been fortified against further attacks. It make no predictions about when that might be. In all, it takes almost six weeks before it’s fully up and running again–and it turns out that whoever broken in stole personal information such as names and address for 70 million customers. Oh, and maybe credit-card information, too.

16. We said “professional.” We didn’t say “good.”

After seven months of ever-increasing hype, RIM releases the BlackBerry PlayBook, which it calls “the first professional tablet.” It’s remarkably buggy, includes a nearly unusable version of Flash, and lacks the one software feature that’s synonymous with the BlackBerry name: built-in e-mail.

May

17. The fine art of pointlessly raising expectations.

In an interview, HP’s European honcho says that its TouchPad–which was announced in February and isn’t supposed to ship until an unspecified date in the summer–will be better than the iPad. “We call it number one plus,” he helpfully explains.

18. Insert your own “weiner” joke here.

Anthony Weiner, a Democratic congressman from New York, means to send a dirty photograph of himself to a woman he doesn’t know as a direct message on Twitter. He accidentally posts it as a public tweet. After trying to convince the world that his account was hacked–and additional disclosures about other embarrassing tweets–he admits the cover-up and eventually resigns.

June

19. I love you. You love me.

Addressing mounting criticism from shareholders and the media, RIM co-CEOs Mike Lazaridis and Jim Balsillie lavish praise on each other. “Jim and I have the perfect balance to make the hard decisions,” says Lazaridis. “…RIM has taken a unique path and the reason why we do things might not always be obvious from the outside.”

20. Maybe “never” would have been a better release date after all.

After fourteen years of delays, legendary unreleased game Duke Nukem–perhaps the most vaporous single product in the history of vaporware–is finally released. The reviews are unanimous: It’s a disaster in virtually every way a game can be disastrous, from the abysmal taste (alien rape jokes!) to the antiquated gameplay.

21. Sadly, threatening to withhold copies of Duke Nukem Forever II proved a surprisingly ineffective threat.

Griping about the “venom” in reviews of Duke Nukem Forever, PR firm the Redner Group says it might stop sending review copies of games to the publications in question. It ends up having to apologize for the threat and is fired by 2K, the game’s publisher.

July

22. Bad Revue.

Logitech says the failure of the lackluster software platform known as Google TV has cost it tens of millions of dollars, and that sales of its Google TV-based Revue box are “negative“–apparently meaning that more of them are being returned than sold.

23. You can’t miss it–it’s right in between the fake Sunglass Hut and the place selling counterfeit Cinnabons.

A blogger visiting Kunming, China visits an “Apple Store” that turns out to be an elaborate fraud–from the tasteful wooden tabletops to the spiral staircase to the name tags worn by employees. It and another faux store are soon shut down by Chinese officials.

24. Ungrateful Netflix customers unfairly resent perfectly reasonable massive price hike.

Netflix changes its pricing policies in ways that impose much higher prices on many customers: a $9.99 plan now costs $16.98. Its cryptic blog post on the changes gets more than 12,000 comments. Very few of them are from customers who are delighted by the news. Many say they’re quitting the service; the company goes on to lose 800,000 subscribers in the third quarter alone.

25. Apple losing iPhone prototypes? Sorry, not plausible.

In an incident that doesn’t make the news until September, Apple security employees enter a San Francisco home and search it for a lost iPhone prototype which they believe is inside. The San Francisco Police Department initially denies being involved in the visit, then says that it was; the home’s occupant says he didn’t know the searchers were Apple staffers rather than police officers, and that he wouldn’t have allowed them inside if that had been clear.

You may remember that back in September, a court in California tentatively approved Walmart’s proposal to provide its settlement to the lawsuit in the form of Walmart.com gift cards, a suggestion that Netflix opposed because that site is home to potential Netflix competitor Vudu. At the time, Netflix called the idea “the equivalent of a marketing campaign that costs Walmart only 68 cents per potential customer,” but it turns out even that might have been lowballing the actual value of the settlement to the end user.

Here’s where we have to use math. Walmart has set aside $27.25 million to pay for the settlement, but a quarter of that amount–almost $6.9 million–has already been claimed for attorney fees, with an additional $1.7 million earmarked for “other costs.” That leaves just $18.7 million left for Netflix subscribers, past or present, who signed up for the service between May 9, 2005 and September 2, 2011. In case you’re wondering, that amount is estimated at a possible 40 million people, meaning a potential payday for each subscriber of…47 cents.

Don’t spend that all in one place.

(Admittedly, that’s a worse case scenario; the $18.7 million will be split between those who apply for their share, and it’s extremely unlikely that all 40 million possible applicants will end up doing so. Those who received the mid-November email about the settlement have until February 14 to file claims for their share of the settlement pie, and even then, the court will have one further hearing in March to finalize the settlement terms. In other words, nothing’s final at this point.)

[This post republished from Techland.]

At some point, all the unhappy Netflix campers will leave, and I still think that the company is going to a good place with its streaming service. At the moment, though, it needs to repair its reputation. It needs to prove that it cares about its customers and isn’t going to spring any more bizarre surprises on them. It needs to show that it has an adequate degree of self-awareness. It just needs to be normal for a while.

And now it has. In a blog post, Netflix CEO Reed Hastings announced that Netflix will stay, well, Netflix. I never stopped assuming this would be the eventual outcome, especially when the initial announcement was followed by radio silence. There was just too much that was too wrong with the idea–the fact that Netflix was eliminating one of its principal attractions as a service, the fact it did so with a video that almost seemed to brag about it, the name, the fact it didn’t have the Twitter handle. It was all the irrational  result of some sort of bizarre midlife crisis, and the oddest part of all is that the idea got announced before the company came to its senses.

The controversial price hikes, however, remain in place.

Netflix is a fine company with a fine service, and–until recently–the way it’s navigated its transition from a snail-mail powered enterprise to a digital one has been really admirable. With any luck, it’ll get back to business so quickly we’ll forget this brief period of weirdness ever happened.

So even though I haven’t been at Netflix in a long time, I can easily imagine the growing frustration they must have felt these last few years as they made decisions they knew were suboptimal for the streaming business in order to maintain compatibility with the DVD business.  How to work out pricing that covers multiple use cases.  How to come up with messaging that embraces two different ways to receive movies.  How to manage the significant differences in the content available between the two services.  How to simplify the landing page and sign up flow.

Well no longer.  Not having to worry about compatibility between the services makes it infinitely easier to optimize every decision around the real prize, which is clearly streaming.  Pricing.  Messaging.  Content.  Sign-up-flow.  All better now.

Randolph doesn’t defend Netflix’s communications about the price hike, name change, and related matters: He calls them “ham-handed” and “tone-deaf.” But I wonder how well Netflix customers would be taking the news if the company’s communications had been flawless, and if it had come up with a way better name than “Qwikster.”

I don’t come away from Randolph’s piece entirely convinced of the righteousness–ham-handed, tone-deaf messaging aside–of what Netflix is doing. Or maybe I’m so convinced that I don’ think the company’s going far enough. I mean, if renting DVDs by mail is so unpleasant a business to be in, shouldn’t Netflix just sell, spin off, or shutter Qwikster? Sooner or later, it’s going to take one of those actions. Why not do it today, rather than complain about all the downsides of disc rentals and how they’re standing in the way of the streaming business?

This whole Netflix-Qwikster split had a fair number of people wondering if Reed Hastings had lost his mind. Hastings is no dummy, though, so there’s got to be some sort of method to the perceived madness.

Industry analyst Michael Pachter wrote in a note to clients the very same thing; that there’s “a method to their madness,” reports MarketWatch.

Pachter’s theory? Netflix could sell its streaming business to Amazon, a company with deep pockets that’s been aggressively trying to make inroads with its digital content offerings. It’s done well with digital books, it’s still trying to get its footing with digital music, and perhaps now we get to see how big it can go with movies and TV. And what better way to go big with streaming movies and TV than to buy the company best known for streaming?

But why split the company in two and just sell the streaming features to Amazon? Turns out it might have something to do with taxes. Since Netflix has physical distribution centers in various parts of the country, Amazon would ostensibly have to start collecting sales tax in those same areas—but just selling streaming bits of entertainment wouldn’t be taxable.

Another potential plus to Amazon’s deep pockets: It might have an easier time securing deals with content companies. Netflix’s leverage so far is that it has customers who want to watch content. Amazon has the same, but it also has customers who want to buy physical DVDs, music, and just about anything else a content company might produce—tangible or otherwise.

I actually love this idea from a consumer perspective for two reasons: One, there’s a chance that Amazon might bundle access to all this new content with its $79-per-year Amazon Prime expedited shipping offering. Amazon already doles out free streaming for certain titles but most of it’s older and/or more obscure stuff—nothing like you’d find on Netflix.

Second, imagine this: You want to watch a current season of a TV show or a newer movie but it’s not available for unlimited streaming. In Netflix’s current state, it’s either just not available or maybe it’s available via the DVD-by-mail service (that’s more complicated, too, now that you have to use two different sites and accounts).

With Amazon integration, anything that wasn’t available for instant streaming as part of your unlimited monthly package could be offered to you either as a paid stream through Amazon’s Video on Demand service or as a physical DVD purchase through Amazon’s online store. That’d be convenient for consumers and could be pretty lucrative for Amazon, too.

[via MarketWatch]

[This post is republished from Techland]

If Dish had managed to come out with something more directly competitive with Netflix/Qwikster during the worst PR week in that company’s history, it would have been a huge coup. Instead, Movie Pass looks like it might appeal to current Dish subscribers or folks who were flirting with getting the service anyhow, but it won’t prompt unhappy Qwikster campers to leave in droves.

Dish does say that it’ll announce a version of Movie Pass that doesn’t require satellite service soon, but it’s not a given that it’ll be able to blow away Netflix/Qwikster. For one thing, the $10-per-month charge (which includes one disc at a time) is made possible by the economics of Dish’s existing agreements with content owners; anything it can offer to non-Dish subscribers will cost more. Also, it isn’t yet competing with Netflix in terms of sheer volume of streaming content: It’s starting with 3,400 movies and TV shows streamable to TVs via a Dish box and 4,000 streamable to PCs, vs. tens of thousands of titles available on Netflix.

Oh, and there aren’t Blockbuster streaming apps for iPhones, iPads, and Android phones yet, although it sounds like they’re in the works.

Blockbuster already has movie rentals and purchases over the Internet, including newer titles not available with the all-you-can-watch service. (Last time I tried it, it was very disappointing–it didn’t even fully support Windows 7–but it may have improved.) The company didn’t announce any integration between this service and Movie Pass today, but that too seems like an area where it could beat Netflix, which doesn’t have any options for people who are willing to pay more to stream the latest stuff.

I still hope that Netflix/Qwikster repairs its current unhappy relationship with a meaningful percentage of its customers, but it’s going to take a while. (Assuming it doesn’t reverse course on the split-up, we won’t really know its full impact until the deed is done.) But the fact that the company that killed Blockbuster is giving Blockbuster the opportunity to kill (or at least wound) it is a remarkable turn of events.

I wonder how quickly Dish/Network can come up with a no-Dish version of Blockbuster Movie Pass, and just how compelling they could make it?