Amazon Prime is regularly $79 a year, but the website has now
been updated to say the service is just $7.99 per month. That's
actually more expensive on an annual basis, but the monthly
approach frames Amazon Prime for the first time as a monthly
product that 's easily comparable to Netflix's streaming service
and Hulu Plus , which are both $7.99 a month.
Amazon has been pegged by analysts as a potential acquirer of
Netflix, particularly after billionaire investor Carl Icahn bought
a 10% stake in Netflix and said the company should be
"We acknowledge that an acquisition of Netflix by Amazon makes
economic sense, insofar as Amazon could then realize savings of
approximately $1 billion per year by consolidating its content
purchases with Netflix," Wedbush Securities analyst Michael Pachter
wrote in a note on Nov. 1. "Further, Amazon alone is in a position
to exploit Netflix's customer list by cross-selling Amazon retail
merchandise and cross-selling Prime memberships to Netflix
On Monday, however, Netflix adopted a poison pill to make a
hostile takeover more difficult. The provision allows Netflix to
flood the market with new shares if any one person or group
acquires 10% or more of the company.
Amazon's decision to test the $7.99 subscription further
suggests a deal to buy Netflix is now unlikely, Mr. Pachter said.
"Quite the opposite," he said via email. "They are trying to make
it look more competitive with Netflix in order to win over new
customers from Netflix."