Amazon Launches a $9 a Month Netflix Competitor, Shows Just How Valuable That Market Is
The WSJ (as well as a bunch of other sources) brings us the news that Amazon has launched am $11 a month Prime membership plan as well as a $9 a month competitor to Netflix and Hulu.
With an yearly cost of $132, the monthly Prime membership is likely targeted at consumers who can’t afford to pay the $99 annual fee for Prime, or those who want to get their holiday shopping shipped cheaply via free two-day shipping.
But the new video service, on the other hand, is aimed at weaning customers away from Hulu and Netflix. From the WSJ:
The move to offer a stand-alone video service suggests Amazon is confident it has the robust programming needed to go head-to-head with Netflix. Amazon has snapped up deals for HBO’s older content, as well as with premium TV network Epix, whose catalog includes “Hunger Games: Catching Fire” and “World War Z.” More recently, Amazon has signed director Woody Allen for an exclusive TV series, and has become an aggressive buyer of independent movies, battling Netflix for film festival favorites.
The new $8.99-a-month pricing began Sunday in the U.S. Netflix plans range from $7.99 to $11.99 a month, though most customers pay $9.99 for more than one simultaneous stream per account. Hulu LLC’s basic streaming service is $7.99, with a commercial-free option of $11.99.
Here’s how the three services compare in the US market:
- Price: $7.99-$11.99 month
- Benefits: Viewing on multiple screens at same time; global access to some shows.
- Exclusive shows: Daredevil, Jessica Jones, House of Cards; Orange Is the New Black; Unbreakable Kimmy Schmidt.
Amazon Prime Instant Video
- Price: $8.99 a month.
- Benefits: Downloads for offline viewing; free use on JetBlue flights.
- Exclusive shows: Transparent; Mozart in the Jungle; The Man in the High Castle.
- Price: $7.99-$11.99 a month.
- Benefits: Many current network TV shows available within days of broadcast.
- Exclusive shows: Casual; The Mindy Project; Seinfeld.
Did anyone else see this coming? I don’t know that anyone predicted it, but if we look back it is obvious how the trends pointed in this direction.
When Amazon banned the sale of Apple TV and Google Chromecast from its site last October, I concluded that it was a sign that the streaming video market was worth more to Amazon than the hardware sales.
A few months back Amazon confirmed that conclusion by offering Showtime and other cable channel subscriptions through its video service, and now it’s launching a Netflix competitor.
According to pundits this is a shot acrosss netflix’s bow. "Jeff Bezos is absolutely escalating the arms race with Netflix,” said Wedbush Securities analyst Michael Pachter, referring to Amazon’s chief executive. “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."
While Amazon does have the advantage, the real question relates to the selection on the respective services.
Which one has the better catalog?
Syn April 18, 2016 um 9:00 am
Amazon has access to a lot of newer movies.
Netflix has the better original shows(aka shows that interest me)
Hulu has the best access to current tv content and they have uped their movie content, so closer to Amazon there.
Amazon is my go to for renting movies, a market I feel Netflix should be in. It’s like they are leaving money on the table by ignoring this market.
I have all three. Hulu for the TV shows, Netflix for the original shows and because I’ve been with them a really long time. If I had to ditch one it would be Amazon. If Amazon had access to the TV content a day after it plays like Hulu, then I would ditch Hulu.
Michael Anderson April 18, 2016 um 9:02 am
Ugh – I actually have all three. My kids mostly use Netflix, wife and I use Hulu and we ALL use Prime! I would soonest drop Netflix and force my kids to deal with it … just like I did with Spotify when Apple Music launched and proved viable. And now … they are fine with it. Since Netflix keeps dumping content and most stuff is mirrored, it is starting to seem superfluous.
Syn April 18, 2016 um 9:09 am
I agree about Netflix dumping movie deals like Epix, especially if you only have one service. If I could only have one i’d probably keep Hulu. It’s the most well rounded bang for the buck.
fjtorres April 18, 2016 um 9:42 am
Netflix is mostly dumping content they can’t get exclusivity on.
They see no reason to pay premium rates on content that will be everywhere else. So they are squeezing suppliers for lower rates on non-exclusive content and using their money on exclusive material or to buy content outright.
Their goal is to own the material instead of licensing it so they can draw in more subscribers and milk the content indefinitely.
Think of it as Netflix 3.0: first they rented DVDs, then they streamed other people’s content, now they are moving to stream their own content so they aren’t at the mercy of the networks and studios. Who, btw, are starting to do their own streaming services. Look to CBS ALL ACCESS, crappy as it is, as a forerunner of things to come.
(Disney is also headed that way. Naturally.)
fjtorres April 18, 2016 um 9:30 am
Actually, Nate, it was pretty much expected.
At least in FireTV circles.
The expectation was that just as the Lending Library in Prime was a test run for Kindle Unlimited, Prime Video was a place holder for a standalone video service. And Prime Video alone is already the third largest video service out there. Maybe second. They’re neck and neck with Hulu.
The next (rumored) step is FireTV adding bundled and ala carte live-streaming subscription channels for cable and (possibly) broadcast networks. Just rumors. But the FireTV installed base is big enough to support a lot of new services and Amazon is investing heavily in content.
You might want to once in a while check out your counterparts on Amazon video, like AFTVNEWS. Bezos media play is more extensive than many people realize. For example, they recently scarfed up most of the best Indie movies at Sundance between them and Netflix, outbidding the Hollywood studios, who are starting to sound a lot like the BPHs circa 2009 when Amazon launched APub. 🙂
The parallels are eerily similar: a focus on digital and the long tail, going after high quality but cheap Indie creators by offering them greater freedom and control than the studios, leveraging their walled garden hardware…
The studios most definitely are not wounded gazelles but like the BPHs their focus on blockbusters and launch window revenues blinds them to the potential from long tail economics in "smaller" movies. Netflix, Amazon, and even Hulu do get it. Netflix has made no secret that they are targeting HBO, which is why Amazon got their deals with HBO, Showtime, and Epix, but so is Amazon.
Right now I’m thinking somebody on the content side has to be thinking of buying Roku. Too much market share, too big an installed base not to be in play.
Expect fun stuff for consumers, lots of angst from the cablecos.
Frank April 18, 2016 um 9:41 am
At 9/month for Instant Video only, it really shows how $99 a year is a good deal, since you get free shipping on most orders as well as the videos.
Anne April 18, 2016 um 12:32 pm
This is what I expected after the Apple TV and Google Chromecast banning but I forgot thinking that until a few weeks ago when I heard that Amazon paid for the exclusive rights to Dr. Who. Whichever article it was in mentioned that Amazon had previously dropped Dr. Who due to lack of exclusivity and that got me started thinking again.
I do hope this doesn’t mean that Amazon has plans to separate out Prime streaming for those of that already pay the annual subscription for prime because I think it’s quite the deal.
As for best catalog- A family member keeps begging for hulu, I keep saying no. I often think I should drop Netflix because I watch much more on Prime with my add-on* subscription to AcornTV but I’m in the middle of a Hinterland binge after just finishing my River binge. Another family member is in the middle of a Monarch of the Glen binge and that one is going to take some time. I guess Netflix stays for now.
*I personally recommend checking out the add-on subscriptions available from Amazon. I only have the AcornTV one but it works seamlessly with the Fire TV (which has become my preferred hardware though I’m happy with the Fire stick while traveling) and I think a plus would be that you deal with Amazon’s customer service rather than Acorn or Roku. Other people I know are happy with their Showtime and Starz add-ons.
Nate Hoffelder April 18, 2016 um 10:48 pm
Yes. Some of the stories about it got pissy and falsely concluded that Amazon wanted to push their own hardware, but there was a deeper story.
Sean April 18, 2016 um 4:56 pm
I saw this coming like a freight train, it was only a matter of time. In fact, why would anyone think it would not eventually happen? Amazon was smart to focus a few years on the bigger spenders, lock in that market, and now are literally cleaning up with the rest.
I have both now, and think their different librarys are worth it.
Tom Semple April 18, 2016 um 11:12 pm
Amazon Prime vs Netflix. Content-wise, I think Netflix is better for the money, but right now I would not want to be without either. Both have outstanding exclusive content. In my dream world, Amazon buys a struggling Netflix and I can drop the Netflix subscription.
But when you add in the ability to purchase and rent anything you might find in iTunes or Google Play, and to have add-on subscriptions that you can manage via a single account and watch list), and you can download much of the content for offline viewing (on a mobile device), and x-ray, and it makes Netflix look a little thin on the ecosystem side.
Hulu is promoted pretty prominently on Fire TV, but I think that requires a separate account and app, which seems not as nice as having an add-on subscription for it. When content is silo-ed in apps, it makes it hard to know what is available and from whom.
Will Entrekin April 19, 2016 um 8:43 am
I also wonder if this means we’ll finally get an Amazon Prime Video app or Apple TV.