Monthly Prime service adds nail to Netflix coffin

Amazon now offering Prime for $7.99 a month, poised to eclipse Netflix

Financial trends and news by Faith Merino
November 6, 2012
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Earlier this week, Changewave released a survey that revealed Amazon’s growing share of the paid streaming TV market.  While a growing number of Netflix subscribers actually use both services (presumably paying the monthly fee for Netflix while renting the occasional movie on Amazon), the survey shows that Netflix’s streaming TV market share is on the decline.

Now it looks like Amazon is going to try to hammer home the final nail in the coffin by offering a monthly subscription service.  A Hacking Netflix reader found a new option on Amazon’s Prime sign-up page (you have to be logged out to see it) that allows users to sign up for a monthly Prime subscription for $7.99 a month.  The yearly subscription fee is $79, so paying month-to-month adds up to approximately $95 over the course of a year.

Of course, it’s no coincidence that $7.99 is what Netflix and Hulu currently charge for their streaming video services.  Additionally, Netflix’s formerly exclusive claim to EPIX movies expired over the summer, and Amazon wasted no time inking a deal that would bring major blockbuster titles to the Prime arsenal, including The Avengers, Iron Man 2, The Hunger Games, Transformers Dark of the Moon, Thor and Rango, Kick Ass, Paranormal Activity 2, True Grit, The Lincoln Lawyer, and Justin Bieber Never Say Never.

 All told, the deal brings an additional 25,000 titles to Amazon’s Prime Instant Video catalog.  This is a game-changing deal for Amazon, which previously only offered older titles through Prime.  Typically, if you wanted to watch a new release, you had to order it through Amazon Instant Video and pay another $4, but the EPIX deal will—for the first time—make new releases available through the Prime subscription.

It kind of makes me feel sorry for Netflix.  They’ve had a really bad year.

And, of course, the Prime subscription also spans the shopping and Kindle gamuts, so subscribers will not only get unlimited video content, but free two-day shipping and monthly Kindle book rentals. 

We reached out to Amazon for more info but haven't heard back from the company, so it's not clear whether the $79 annual subscription will still be an option.

Offering the $7.99 monthly option is a clear win for Amazon, which will now be able to target those shoppers who aren’t sure if they want to shell out $79 for an entire year, and thus are willing to pay extra for the ability to change their minds.  (I’m always baffled when I meet people who think this way—like people who only fill their gas tanks up halfway so they only spend $20 at a time, like they’re not going to have to fill up again three days later and fork over another debit card fee.  Whatever.)

In short: be afraid, Netflix. 


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