Last Sunday, the courier company announced that it was going to start selling its prime video service as a stand-alone product at $8.99 a month. Until now, Amazon.com Inc (NASDAQ: AMZN) had been offering an only bundle which included the streaming video and music service. The combo also includes a free 2-day shipping option when using the courier service.
The full bundle will still be available at the same cost, $99 a year, which is currently the best price for streaming services in the market with the 2-day shipping perk. However, users that do not want an annual commitment with the company can pay $9 a month to get prime video, but there is more. Amazon will let users enjoy the service of the full bundle, video and music streaming plus the free shipping for $10.99 a month.
With the new set up, the company wants to give people practical options, but paying it monthly is still 30 percent more expensive than paying the annual quota. Nevertheless, it lets potential users try out the service without having to be tied up to Amazon for a full year. In addition, users could pay a couple of months when they are supposed to buy a lot of things on line and save some money with the free shipping option.
Many specialists say that the courier monster wants to compete with reigning the services provided by Netflix and Hulu and it really seems so. So far, Netflix enjoys a lasting and very steady dominance. It recently announced a $2 increase in the monthly fee which makes Prime video a cheaper option. However, Netflix has become famous for its original series and there is even a meme based on the service. To its Marvel based series, the company will soon add a new Psych-thriller with Naomi Watts. On the other hand, Amazon has gained terrain with Transparent and Mozart in the Jungle.
The stock market has spoken too. Investors around the world reacted pretty quickly to Amazon’s new stand-alone product and Netflix’s stocks actually plummeted 2.2 percent on days trading and another 8 percent in the after-hour market.
At a monthly basis, Hulu is the cheapest option from the group with an $8 fee followed by Prime Video at $9. Which leaves Netflix’s service as the most expensive of the bunch. But right now, the latter is just too big to be affected by the new competition. The fourth quarter of 2015 was great for Netflix, its data traffic represented 37 percent of North American downstream.