Amazon's new Prime pricing a move on streaming dominance

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If you’re looking for more streaming content in the $7.99-a-month price range, Amazon has quietly added a monthly subscription option to its Prime membership plan.

With it, the company takes aim at streaming competitors Netflix and Hulu, which also offer plans in the $7.99 sweet spot. Though Amazon has nowhere near the amount of content Netflix does, a Prime membership also includes free two-day shipping and access to the Kindle Owners’ Lending Library.

Prime membership is normally $79 a year, so monthly subscribers are paying a higher premium for their membership ($7.99 versus $6.58). But some may prefer the lower up-front cost.

An Amazon spokesperson said the company is testing the new monthly membership option.

“The way you acquire new customers is to lower the perceived barrier—$80 seems like a big ask when you’re asking for it all up front,” says Gartner media industry analyst Michael McGuire.

Netflix still in front on content

Netflix still leads the pack in content offerings and traffic share. According to a Web traffic report from network research firm Sandvine, Netflix in September drew 33 percent of primetime Web viewing between 9 p.m. and midnight. Amazon captured 1.75 percent of the market, Hulu 1.4 percent, and HBO Go took 0.5 percent.

Amazon’s new Prime pricing follows just two months after the company inked a deal with Epix, giving Prime Instant Video subscribers access to films from Paramount, MGM, and Lions Gate. Netflix had an exclusive deal with Epix that ended in September, and Amazon swooped in to snap up the content when it became available.

If Amazon continues to build up its content library, the company could soon become a viable Netflix competitor. Other media companies, such as Barnes & Noble, are trying to wedge their way into the streaming space, so McGuire says breadth of content options will become a pivotal selling point.

“They’re going to have to grow the catalog,” McGuire says. “And there may be some interesting things they develop in terms of content. Amazon looks to transact almost anything and everything. This is another mark of their belief in and pushing of their own ecosystem.”

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