Whether you think this is a serious competitive threat for Netflix (NFLX) depends a lot on your reading of the streaming-video marketplace and Amazon’s place in it. For example, is the online retailer serious about video, or is it just trying to promote its Prime subscription service in as many ways as possible? And does Netflix have enough of a lead that it can afford to dismiss Amazon’s efforts?

RBC analyst Mark Mahaney seems to believe that Amazon (AMZN) poses a distinct threat to Netflix’s dominance, calling the Prime Video announcement a “significant negative development” for the streaming-video giant in a research note for clients.

Among other things, Mahaney says the fact that Amazon let users download shows to watch offline is a competitive advantage compared with Netflix (which has poo-poohed the idea of downloads in the past, although it could always change its mind). However, the RBC analyst also notes that Netflix has the kind of size and scale in video that Amazon does not.

At least a few investors seemed to agree with Mahaney that Amazon’s move is a threat to Netflix, since the streaming provider’s stock was down by as much as 4.5% on Monday—although investors were likely also nervous in advance of Netflix’s earnings, which the company was set to report after the market closed on Tuesday.

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One thing is fairly clear as far as Amazon is concerned: History suggests that underestimating the company and its competitive abilities can be a dangerous strategy. Among other things, the company managed to build a $100-billion cloud-computing business without many competitors realizing until it was too late—and it did so at the same time as it was building a separate $200-billion retailing business.

In other words, the company has shown repeatedly that it has the ability to identify and capitalize on a new business or market, and it has the resources to invest substantial amounts of money in those new ventures where necessary.

It should be noted, however, that Amazon doesn’t always succeed even when it pours those massive resources into a new market, the much-hyped launch and dismal failure of the company’s Fire cellphone offering being a case in point. But that’s a relatively rare example of a market where Amazon was unable to mount a challenge to incumbents.

The only real question that matters for Netflix fans—the ones who have given the company a market capitalization that is greater than CBS, HBO and Viacom put together—is whether streaming video is something that Amazon is serious about. Does it want to become a full-fledged Netflix competitor, or does it just see video as a kind of marketing tool, a way to turn more users into Prime subscribers?

Obviously, Amazon CEO Jeff Bezos is the only one who knows the real answer to that question, but we can hypothesize a little based on the company’s recent moves in video. And those investments show that Amazon sees video of all kinds as a place where it wants to make its mark, and it’s willing to spend heavily to do so.

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The company has invested a substantial amount in developing both TV shows like Transparent, which won an Academy Award last year, and in first-run movies. In 2014 alone, it spent an estimated $1.3 billion developing new content and acquiring existing productions. And industry insiders say that Amazon has shown that it is ready to out-spend both its traditional and digital competitors.

There’s no question that Netflix maintains a dominant position in streaming video for a reason—the company saw the potential of the market early and has invested heavily, and its design and user interface and marketing success are a big part of that. But Amazon is no slouch when it comes to any of those qualities either, and it has pockets that are at least as deep as Netflix has, if not deeper. It could be a formidable competitor.