Amazon has made several moves this week in a bid to strike at the heart of Netflix, but remains adamant that its focus is on its retail business rather than in competing with the SVoD king. First off, Amazon has cut the tie between its video service and its full Prime delivery service, by launching a standalone subscription service in the US. To add insult to injury, Amazon has decided to put a price tag of $8.99 per month on this service, which undercuts Netflix’s monthly subscription fee of $9.99.
Amazon VP of Digital Video Michael Paull pointed out that this move is not intended to target Netflix, but one to enhance the value of its retail premise, despite the announcement coming the day after Netflix raised the prices for its longest serving members – which were on the $7.99 per month tariff, but are now having to pay $9.99 for the HD service. Paull cited that there are some 20 million homes in the US up for grabs that are currently without pay TV subscriptions, of which around half have ample broadband speeds for required for streaming the likes of Amazon Prime Instant Video – 3.5 Mbps for HD, and 900 Kbps for SD.
The retail giant is still new to the streaming game compared to Netflix which has been doing so for 9 years and will be turning 20 years old next year, and it recently launched in 130 additional countries. A significant 42% of its 81.5 million customers now reside outside of the US, whereas Amazon Instant Video is only available in five countries – the US, UK, Germany, Austria, and Japan (and soon to be India). Prime has around 60 million subs, but while we know 100% of Netflix subscribers are there to watch video, Amazon’s video viewer figures are not public and a large proportion of Prime users will have signed up purely for the delivery service.
Paull also revealed at NAB that more than 30 companies have now joined its partner program – with the freshest member being NBC Universal which launched its comedy subscription service Seeso on Amazon Video this week. The lineup also features Starz, Showtime, Acorn TV, History Vaul – A+E’s recently launched SVoD offering.
“We’ve built up a highly engaged group of customers and built the technology to support a wide range of devices. That is a massive investment and the entry barrier for digital video is quite high. People expect a great and reliable quality of streaming,” said Paull.
However, Netflix may be pulling out the stops to match the popular data saving feature that Amazon Video already possesses – the ability to download content to devices for offline viewing. as CEO Reed Hastings has hinted that the service may, in the near future, allow users to download content for offline viewing. “We should keep an open mind on this. We have been focusing on the click and watch, and the beauty and simplicity of streaming. But as we expand around the world where we see an uneven set of networks, it’s something we should keep an open mind about,” said Hastings. Although offline viewing is only available for a handful of content on Amazon, as sorting out contractual agreements with certain content providers and movie studios is no easy feat, as Netflix well knows.
Amazon seems willing to try just about anything to get more people to sign up to its Amazon Prime service, and may soon be looking towards bidding for live sports rights, whereas Netflix execs have reiterated that the company has no interest in sports.