Amazon Tests $7.99/m Prime Service to Tackle Netflix, Hulu?

Amazon is reportedly testing a new version of its Prime service that allows customers to pay a $7.99 monthly fee rather than $79 per year. Naturally this brings up speculation that the online retailer is going after Netflix and Hulu Plus who offer streaming video services for the same monthly price. However Amazon still has a long way to go before it's on equal ground with its video streaming rivals.

But Amazon Prime is more than a video streaming service. The membership offers free two-day shipping on millions of items with no minimum order size. Subscribers can also borrow an ebook for free each month from the Kindle Owners' Lending Library. Now throw in unlimited streaming of thousands of movies and TV shows from Prime Instant Videos, and customers seemingly have a better deal than what's offered with Netflix and Hulu Plus.

Back in September, Amazon announced that it signed an agreement with EPIX to add its catalog of over 25,000 movies and TV episodes from Paramount Pictures, Metro-Goldwyn-Mayer Pictures, and Lionsgate, doubling the number of titles since Amazon first introduced the Kindle Fire in September 2011. Titles include The Avengers, Iron Man 2, The Hunger Games, Transformers Dark of the Moon, Thor and Rango as well as popular favorites such as Kick Ass and Paranormal Activity 2.

"We are investing hundreds of millions of dollars to expand the Prime Instant Video library for our customers. We have now more than doubled this selection of movies and TV episodes to over 25,000 titles in just under a year," said Bill Carr, Vice President of Video and Music at Amazon. "We are thrilled to be able to offer our customers such popular EPIX titles, many of which were just recently in theaters."

Prior to its deal with EPIX, Amazon signed a new agreement with NBCUniversal Cable & New Media Distribution in August to expand the network's programming on Prime Instant Video including prior seasons of Parks and Recreation, Parenthood, Friday Night Lights, Heroes, Battlestar Galactica and more. A deal with ESPN was also made that same month, bringing the network's "30 for 30" film series to Amazon's streaming service.

"We're continuing to grow our Prime Instant Video library to provide our Amazon Prime Members with all the content they want - from feature films, to hit TV episodes to documentaries, and everything in between," said Brad Beale, director of digital video content acquisition for Amazon. "With the addition of ESPN's 30 for 30 series, film lovers and sports fans will have instant access to enjoy compelling sports stories from talented and thoughtful film makers including, 'The U,' 'Pony Excess' and 'Winning Time.'"

But can Amazon Prime take on Hulu Plus and Netflix with its expanded library? That remains to be seen. Unlike its rivals, Amazon is limiting playback to "hundreds" of devices including Smart TVs, Blu-ray players, set-top boxes,, the Xbox 360, the PlayStation 3, the iPad, the Kindle Fire tablets and more. You can't stream your favorite content to the iPhone, the iPod Touch, Android phones and tablets, or even the Nexus 7. Amazon hasn't even released an app for Windows 8.

Here's the complete list of compatible devices.

While the monthly price may be appealing, Amazon needs to cover more ground if it wants to really compete with Netflix and Hulu Plus. Even more, paying a monthly fee will ultimately cost more at the end of the year, leeching $95.88 from the customer's wallet instead of $79.

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  • Amazon is moving in the right direction. I pay around 2K per year for crappy cable service. Someone needs to figure out that consumers are willing to pay a lot more than $7 per month, as long as the content is good. With Netflix, Prime and Hulu I can get 80% of what I want to watch. All I need is a little more cable content, HBO and Showtime. Then I will dump the antiquated cable provider. How about NetPrimelu?
  • I already have Amazon Prime, but I don't use the video feature a whole lot. Amazon needs to add native apps to Android, Consoles, Windows, and Windows media center if they really want to compete. They're library is to the point where it's a serious contender or, it's just to clunky of an interface and hard to access (relatively speaking).
  • The problem with Netflix, and with this service if they go forward with it, is that it will have a collection of stale content, most of which I'm not interested in watching. After a few months, I'll have gone through all of the stuff that I did want to watch, and they will not be adding more at the pace that I'd want to see it.

    I would actually rather they focused on the movie rentals and tried to negotiate deals to make the movies watchable from home sooner. Maybe add a $7 tier for more recent movies in HD. Oh, and Netflix manages to be able to show their high-def content on PC. Amazon ought to be able to too.