Will Amazon Launch a Stand-Alone Streaming Product That is Cheaper Than Netflix?

The NY Post reported that Amazon is Looking into Taking on Netflix:

They’re looking into it being a standalone subscription service,” one content executive said. A second exec noted they believe Amazon is chewing over a possible charge.

The Internet retailer does have a paid video-on-demand movie and TV service — but the streaming service would be different.

“The big issue is their bundled media service,” said one digital media executive. “The subscription service, with the goodies being free video, is contractually an issue for the licensers.” Tinseltown talent doesn’t like being a loss-leader for Amazon shipments of everything from diapers to digital devices.

The story notes that Amazon has about 7 to 8 million Prime subscribers, based on analyst estimates. 

Netflix also lends some credibility to the story by mentioning Amazon in domestic competition in the Q4 Letter to Investors.

One class of competitors is the other over-the-top pure plays such as Hulu Plus and Amazon Prime. We expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours. Both Amazon and Hulu Plus’s content is a fraction of our content, and we believe their respective total viewing hours are each less than 10% of ours. In the case of Hulu Plus, subscribers have to pay for the service ($7.99) and still watch commercials (unlike, commercial-free Netflix). Even if Hulu could afford our level of content spend, at the same price consumers would prefer commercial-free Netflix over commercial- interrupted Hulu Plus. 

There were many rumors over the past few years that Amazon was interested in buying Netflix, but it was widely discounted because of tax issues, so it's not surprising that Amazon is looking to compete with Netflix since they can't buy them.

Comments

[RJM]

I havent tried either amazon or hulu. Im not PAYING to watch commercials.

Amazon tried to give me $5 worth but screwed it up and I ended up getting a $5 credit which I used for something else so I still have never tried amazon video.

So neither are for me but both are important to keep Netflixs price reasonable.

[George Isaacs]

Cheaper would be good, especially if there's less content. But if they can get stuff that isn't on Netflix, even better. I think there's room for multiple services at the $8-$10 range.
Netflix has a lot of Anime, but much of it is still English dub only, so Crunchyroll fills that niche when I'm in the mood for it.

[moviegeek]

I would welcome a Netflix competitor but most of the content on Amazon is also on Netflix, if they had a cheaper price point($5.99) I would sign-up. The main thing holding up exclusive content is the movie studios, they sell the same crap to everyone but hold the good stuff for PPV.

[Tvaddic]

Amazon will probably have a base price similar to Netflix, but give a discount to Amazon Prime subscribers.

[Robert Emmerich]

One of the good things about Amazon naming it's "shipping" program "Prime" is that it could mean anything. My guess is Amazon would just offer "Prime Video" on a monthly basis, $5.99 as previously mentioned. No reason for them to offer a discount to current Prime subscribers, they are already getting it, this is just a way to bring in people who are more comfortable paying $6 per month than $79 per year (buy 11 months get 1 free says the calculator, so nearly the same price).

[bigqueue]

I welcome a competitor, but it would have to be viewable on TV devices (e.g. TiVo) too... and would have to have some form of queue/watch-list/organization.