, Inc. Challenges Netflix, Inc. With Cheaper Video Service

0, Inc. Challenges Netflix, Inc. With Cheaper Video Service

For Netflix, competition is getting harder. Now Amazon is trying to become the primary destination of streaming video by challenging the company with new features and schemes. On Sunday, Amazon said for the first time that it will start offering its video streaming service as a standalone, and the monthly subscription at $8.99 is be a dollar less than Netflix’s most popular plan, says The Wall Street Journal.

Netflix vs. Amazon

Amazon and Netflix have been rivals for years and have worked to be the better by offering amazing content and original series like Amazon’s Mozart in the Jungle and Netflix’s House of Cards. Netflix spends about $4 billion, excluding overseas rights or DVDs, for streaming video content yearly, and Amazon spends about $3 billion.

Amazon has been offering its video service as an added benefit for subscribers of its $99 annual Prime shipping service. Also the online retailer said for the first time, U.S. customers will be offered Prime membership monthly for $10.99. The new monthly option could be switched off and on as per customers’ wishes, said an Amazon spokeswoman.

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This new move from the Seattle-based firm indicates that it is pretty confident about its services. The online retailer has snapped up deals with premium TV network Epix, which has Hunger Games: Catching Fire and World War Z in its catalog, and has also bought HBO’s older content as well. Also the online retailer recently signed director Woody Allen for an exclusive TV series.

Rising rivalry in video streaming field

Wedbush Securities analyst Michael Pachter, referring to Amazon’s chief executive, said, “Jeff Bezos is absolutely escalating the arms race with Netflix. 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.”

According to estimates, Prime customers spend twice as much as non-prime customers do in a year, in addition to membership fees. The online retailer has included more benefits like exclusive discounts and streaming music. So it can be seen as a smart move from Amazon.

Netflix CEO Reed Hastings predicted Amazon’s standalone streaming service as long ago as 2012. Cable television providers like Dish Network and Comcast offer inexpensive and comparatively cheaper streaming packages, and traditional TV networks like HBO and CBS have released their own standalone services.

Netflix plans range from $7.99 to $11.99 a month, but most consumers pay $9.99. Hulu’s basic streaming service is $7.99, and it comes with a commercial-free option priced at $11.99.

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