It's very hard to imagine a situation in which Amazon could lock new entrants out of the video encoding market. All you need to enter this market are a fast connection and a server farm, both of which you can get for yourself or rent from numerous IaaS providers.
Amazon might very well have a price advantage, but other parties that can offer better quality of service or better L10n or whatever will still attract customers. This is how markets are "supposed" to work.
It would be shady if Amazon set their prices for video encoding below the price of raw EC2, because then competitors would be in trouble. But they haven't done that.
Amazon might very well have a price advantage, but other parties that can offer better quality of service or better L10n or whatever will still attract customers. This is how markets are "supposed" to work.