Amazon.com (NASDAQ: AMZN) is reportedly considering creating a stand-alone subscription streaming video service to compete directly with Netflix Inc. (NASDAQ: NFLX). Amazon’s current streaming service is including with a $79 annual subscription to the company’s Amazon Prime service.
The New York Post cites sources who claim that movie and TV producers don’t like being the loss-leader for Amazon’s soup-to-nuts retail sales. The content providers would much rather see a video-on-demand type program where viewers are charged for every movie or TV show they watch. The “all-you-can-eat” subscription model, in the studios’ eyes, leaves money on the table that they believe should be theirs.
Amazon Prime currently has about 7-8 million subscribers to Netflix’s estimated 20 million. That could change if Amazon is able to persuade the content industry to stick with the subscription model.
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