|Stats: 279 members, 5,873 topics. Date: January 21, 2017, 1:40 pm|
With Netflix earnings on the horizon, rival Amazon made a big move in the video streaming space. Starting Monday, the retailing giant will allow consumers to subscribe to its Video service on a standalone basis. The streaming service remains available to members of Amazon Prime, the annual subscription offering free shipping and other perks. The standalone plan costs $8.99 a month, $1 below Netflix's standard plan of $9.99.
Netflix also offers a basic $7.99-a-month plan, but it does not include access to high-definition content. Amazon is also expected to offer Prime to consumers on a monthly basis. The plan costs $10.99 a month, and provides full benefits including Video, free shipping, and access to its streaming music service. Users can currently subscribe to Amazon Prime for $99 a year. Users who subscribe to just the monthly Video package would pay nearly $108 a year, while consumers opting to pay for Prime month to month will pay roughly $132 a year.
Details of the plans were first reported by The Wall Street Journal and New York Times . Shares of Netflix are down 2% in morning trading. The move by Amazon raises the stakes in its battle with Netflix. The tech giant has ramped up its original programming to keep up with Netflix, which boasts popular series including House of Cards , Orange is the New Black, and Marvel's Daredevil. The company also reached a multi-year deal with Disney in 2012 to host their movies shortly after they leave theaters.
Amazon counters with its own successful programs such as Transparent, which snagged five Emmy wins last year. Amazon also has a deal with HBO to showcase the channel's older series including The Wire and The Sopranos . Amazon's move represents a "significant negative development" for Netflix, says Mark Mahaney, analyst with RBC Capital Markets. Along with a lower price point, Amazon will offer access to 4K content, while Netflix offers Ultra HD programming through its $11.99 Premium plan.
Mahaney says both factors could place pressure on Netflix to convert subscribers to pricier plans. "Amazon certainly has the brand name, the customer relationships, and the focus on high-quality consumer experiences to impact the growth in Netflix’s U.S. subscriber base, and perhaps eventually its global subscriber base," he says.
However, in the long term, Netflix is established enough to maintain a place among the leaders in streaming video. "Unless it materially mis-executes, it’s hard not to see Netflix as one of streaming’s global leaders in the future."
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