Netflix who? Kindle Fire to do for video what iPod did for music

Netflix' missteps — raising prices and then flip-flopping on plans to separate its DVD business — have cost it. During its third quarter, the video-lending company announced yesterday, U.S. subscriber numbers fell to 23.79 million from 24.59 million the quarter before, while operating income dropped to $120 million, compared to $124 million during Q2.

Moreover, "The company’s stock has fallen from more than $300 in July to under $120. More than $9 billion of market capitalization has disappeared. For the benefit of shareholders, have you considered stepping down?" an unsparing Andrew Goldman asked Netflix CEO Reed Hastings in Sunday's New York Times. (Hastings replied, "Not for a second.")

With streaming video accounting for up to 60% of wireless carrier traffic (CP: Video accounts for up to 60% of carrier data traffic, says report) and Netflix alone said to account for nearly 30%, are Hastings and company hurting the industry?

It's about to bounce back — if not catapult forward, with major thanks to Amazon, according to streaming media expert Dan Rayburn.

"Many times I am asked what the next catalyst is for the streaming media industry and without a doubt, my answer would be Amazon," Rayburn wrote in a blog post this morning.

While Amazon's Web Services and CloudFront have made distributing video easy and affordable, and its offering of more than 12,000 on-demand movie and TV shows is growing "quite nicely," wrote Rayburn, it's the Kindle Fire that's going to "propel Amazon to the top of the video food chain."

Wrote Rayburn:

At no time in the industry, that I can remember, has a product come to the market that is affordable, dedicated to the consumption of video and will be sold by the tens of millions in such a short period of time. Some might argue that with more than 100M of the latest gaming consoles from Microsoft and Sony deployed in the market that they would classify, but those devices are still dedicated to gaming. The Kindle Fire truly is a product that was developed to consume video and will be adopted by the masses, with video being front and center.

Added to that is the Fire's Silk browser, which is optimized for video as well as Web pages, and will see "crazy fast startup times for video."

Rayburn expects the Kindle Fire to sell exceptionally well and accomplish even what Apple couldn't do: jump start the streaming media industry.

"That growth is going to help not only content owners but also all of the vendors who help those content owners create, ingest, transcode, store, manage, protect, monetize, distribute and track their content," concluded Rayburn.

"Within the next two years, the Kindle Fire is going to become to the online video industry what Apple's iPod was to the music industry."