Uh-Oh, Netflix: Amazon Has Monthly Video Streaming

Company is getting serious about its streaming content
By Jenn Gidman,  Newser Staff
Posted Apr 18, 2016 11:07 AM CDT
Amazon Takes on Netflix With Monthly Vid-Streaming Option
This Sept. 6, 2012, file photo shows the Amazon logo in Santa Monica, Calif.   (AP Photo/Reed Saxon, File)

Up till now, Amazon customers who forked over the $99 fee for Prime could also exclusively enjoy its streaming video. Now Amazon is opening its streaming library to the masses with a stand-alone monthly subscription for $8.99—directly competing with Netflix and undercutting its most popular plan by $1 per month, the Wall Street Journal reports. Amazon is making joining Prime more flexible as well, offering for the first time the option to join Prime for just a month at a time for $10.99, a big plus for consumers who just want to shop on Amazon during the holidays or binge-watch a favorite show, then cancel. Hulu, the third main player, offers its basic plan for $7.99 a month. "[Amazon CEO] Jeff Bezos is absolutely escalating the arms race with Netflix," an analyst says. "The two services will compete more closely for customers, and Amazon has the marketing advantage by offering the full Prime service for just a little bit more each month."

A big pro of the monthly Prime, per the New York Times: It eliminates convincing people to hand over $99 upfront to commit for an entire year. A pesky con, once you do the math: Paying for an entire year on a month-to-month basis will cost a consumer almost $35 more than the annual fee. Amazon's decision signals a newfound confidence in its streaming content, boasting rights to hit shows like Downton Abbey, original programs such as Transparent, projects helmed by big names like Woody Allen, and indie films to compete with Netflix's library. A RBC Capital Markets analyst tells Barron's "this [is] a significant negative development for Netflix," but he points out Netflix's "brand strength" (including the "Netflix and Chill" phrase he says has become "part of the vernacular"), and a recent Morgan Stanley poll cited by Business Insider has 29% of consumers deeming Netflix's original programming as best, compared with just 5% for Amazon. (Read more Amazon stories.)

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