Amazon Prime May Give Netflix A Run For Its Money With $7.99 Monthly Subscription

By Megan O'Neill 

Word on the street is that Amazon is testing out a new monthly subscription option for Amazon Prime members that could ramp up the service’s competition with Netflix and Hulu.  The service, which includes free shipping, free streaming of movies and TV shows, and the ability to borrow one free e-book a month from the Kindle Lending Library, currently costs $79 a year.  However, some users are now being given a new option—to subscribe for $7.99 per month.

It looks like this option is not yet available to everyone.  When I visit it still informs me that “After your free trial, Amazon Prime is just $79/year.”  However, Laura Hazard Owen of GigaOM confirmed, with the below screenshot, that indeed some users are being given this new option.

The $7.99 figure matches both Hulu Plus’ and Netflix’s monthly streaming subscription plans and, according to Ad Age, analysts say that Amazon’s adoption of a monthly subscription option could indicate the beginning of much more hostile competition between the companies, despite the fact that earlier this month analysts mulled over the possibility of Amazon acquiring Netflix.

Ad Age’s Jeanine Poggi writes that Wedbush Securities analyst Michael Pachter wrote in a note earlier this month, “We acknowledge that an acquisition of Netflix by Amazon makes economic sense, insofar as Amazon could then realize savings of approximately $1 billion per year by consolidating its content purchases with Netflix.  Further, Amazon alone is in a position to exploit Netflix’s customer list by cross-selling Amazon retail merchandise and cross-selling Prime memberships to Netflix customers.”

However, following the launch of the $7.99 subscription plan, Pachter says an acquisition is unlikely.  “They are trying to make it look more competitive with Netflix in order to win over new customers from Netflix.”

Amazon Prime features many of the same titles as Netflix and the additional perks of Amazon Prime, including the Kindle Lending Library and free shipping may give Netflix users the incentive they need to drop their streaming service and try something new.

What’s your take on this news?  Would you subscribe to Amazon Prime for $7.99 a month?

Megan O’Neill is the resident web video expert here at Social Times.  Megan covers everything from the latest viral videos to online video news and tips, and has a passion for bizarre, original and revolutionary content and ideas.