Amazon.com is testing a price plan for its Internet streaming video service that's 22%more overall -- to be more competitive with Netflix.
Here’s the deal: The online retailer offers its Amazon Prime Instant Video service as part of the Prime free-shipping program, which is $79 per year.
Now Amazon is testing a $7.99 monthly option for Prime (or $95.88 per year), which is exactly what Netflix and Hulu Plus charge for their streaming services. The new price option was noticed by blog site Hacking Netflix.
An Amazon rep confirmed the new monthly option, which is being tested with a small group of customers.
“We are always looking at ways to improve the shopping experience for our customers and are testing a monthly Amazon Prime subscription,” spokeswoman Pia Arthur wrote in an email.
The Amazon Prime Instant Video service offers more than 25,000 movies and TV episodes. The company this fall inked a multiyear deal with Epix -- which previously had an exclusive deal with Netflix for online distribution (see Amazon Streams Epix Flicks, In Blow To Netflix).
Meanwhile, Carl Icahn’s disclosure last week that he’s taken a 9.98% stake in Netflix fueled more speculation that the streaming company could be acquired. However, Netflix on Monday adopted a "poison pill" shareholder-rights plan, to discourage any individual shareholder from accumulating more than a 10% stake (institutional shareholders are capped at 20%).
In any case, Amazon was picked as the most likely player to acquire Netflix, among those who believed the company will be bought, according to a poll by BTIG Research of 123 investors, 116 industry executives and 10 press/bloggers (registration required).
According to BTIG’s survey, 29% said Amazon was the most likely acquirer, followed by Microsoft at 25% and Google and Apple tied at 11%.
Many of those polled said Netflix is “not a sustainable standalone business,” with industry executives more concerned than other respondents with Netflix’s cash burn and the rising cost of content, “and with the view that competition was only going to get more challenging in the years ahead,” BTIG analyst Rich Greenfield wrote.
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