Why You Can Trust CNET Amazon may be aiming at Netflix with new streaming service
Taking a shot at Netflix, the retail giant is reportedly looking to move beyond Amazon Instant Video by launching its own standalone, subscription video service, says the New York Post.
Amazon may be looking to cut into Netflix's action by launching a new video streaming service.
Citing information from industry sources, The New York Post said the new service would expand beyond Amazon's current Instant Video by launching as a standalone, subscription-based business.
Amazon's Instant Video is free with a $79 Amazon Prime subscription, though nonsubscribers can buy or rent individual movies and TV episodes on a per-title basis. In contrast, the new service would borrow a page from Netflix's business model. Amazon is just currently trying to figure out what to charge, one source told the Post.
Netflix is even anticipating the new video offering from Amazon.
In a letter (PDF) directed to shareholders yesterday, Netflix said that "we expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours."
But Netflix discounted the potential competition posed by Amazon and by rival Hulu Plus, adding that "both Amazon and Hulu Plus's content is a fraction of our content, and we believe their respective total viewing hours are each less than 10 percent of ours."
If the reports are true, Amazon is certainly hoping its new service can win over any Netflix customers still disgruntled over the video company's price hike and other missteps from last year.
But the right time to strike may have already passed. Yesterday, Netflix reported a healthy jump in sales and a 220,000 increase in streaming customers to 21.6 million for the fourth quarter.
Amazon did not immediately respond for CNET's request for comment.