Monday, November 24, 2014

Amazon to launch new ad-supported streaming service

While Amazon has denied reports of launching a free streaming video service to compete with Netflix, it does appear to be looking to release a new offering that will undercut Netflix's price of $7.99/month early next year. This new offering would be supported by ads and would be entirely separate from Amazon's Prime service, which costs $99 a year. The lower price point would help Amazon steal consumers from Netflix who may not want or need the other features offered by Amazon Prime.

While consumers tend to have a distaste for ads, it is always interesting to see the emergence of new ways to advertise result in an end "benefit" to consumers. While Netflix has operated on an ad free model, Amazon could potentially provide a "better" value to consumers and make up for it with advertising revenues. It can be tough to predict whether consumers ultimately favor the ad free experience compared to the money saved through putting up with a few ads. In the end, depending on how different the price points are, the content both platforms have will likely still determine who succeeds in the increasingly competitive streaming video space.

Source: http://nypost.com/2014/11/21/amazon-plans-a-streaming-video-alternative/
http://www.digitaltrends.com/home-theater/netflix-king-internet-traffic-amazon-making-ground/

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