Amazon is starting to offer its streaming video as a standalone subscription to rival Netflix, showing that the movie-streaming introduced five years ago as a customer retention tool has grown into a potentially lucrative product of its own.
The new Prime Video, which includes on-demand access to thousands of movies and original Amazon productions, will cost $8.99 a month. Video was previously only available as part of its $99-a-year free-shipping service, Amazon Prime.
That free-shipping service, which still includes video and music, also got a new model with the introduction of a monthly payment option at $10.99 per month.
The video plan and new monthly payment for Amazon Prime show the company is catering to customer calls for more flexible options than a year-long commitment. Those making the annual payment will get a 25% discount compared with monthly rates.
Amazon began experimenting with a monthly payment option for Amazon Prime members through a partnership with Sprint Corp. last month.
The cheapest Netflix subscription available for new customers is $7.99. The most popular Netflix subscription, including HD and the ability to stream to more than one device at once, is $9.99.
Hulu starts at $7.99 per month and offers an ad-free version for $11.99 per month.
All three streaming services also compete with traditional TV packages.
-- Bloomberg News with Ad Age staff