Netflix, who was battered last year after making changes to its pricing structure, is preparing shareholders for the possibility of increased competition from Amazon.
In a letter, Netflix CEO Reed Hastings told his shareholders that he expects Amazon to launch its own standalone video streaming service. He added that is likely to be priced below Netflix’s current $8 a month subscription price. He also warned that Netflix will continue to face an increase in competition from not only Amazon, but also Hulu and other content distributors, as alternatives to traditional TV watching continue to grow.
Hastings did point out that Amazon has only a fraction of content that Netflix offers. Though Netflix does have some exclusive deals with certain studios, what was left unsaid was Amazon’s rapid and aggressive growth.
It was only a year ago that Amazon began offering streaming movies and TV shows through its $79/year Amazon Prime service. They started with approximately 5,000 movies and TV shows of the time, and are now offering about 12,000. Amazon has also sold millions of Amazon Fire tablets over the last two months, which gives it a huge pool of potential users that they have already built a relationship with.
Amazon has not made any comments regarding a standalone streaming service. But if something along the lines is launched, we will let you know right away here at NFS.