Netflix’s view on Amazon’s Prime Video service
Netflix (NFLX) is facing increasing competition from OTT (over-the-top) services. Amazon’s (AMZN) Prime Video service is proving to be another strong contender for Netflix. Amazon has taken on several initiatives in the last year to expand its Prime Instant Video service to counter Netflix.
In its fiscal 3Q16 earnings call, Netflix was asked about how it viewed Amazon’s Prime Video service as a competitor. The company stated that it viewed Amazon’s Video service and other OTT services as competing for a viewers’ screen time. The company added that it counted it as a win when viewers spent an incremental amount of their screen time on Netflix. However, Netflix said that this could only be done by offering original content that had a global appeal and by focusing on global content licensing rights.
Amazon’s initiatives to counter Netflix
Last year, Amazon announced its Streaming Partners Program, an OTT streaming subscription program. Under this program, Amazon partnered with around 20 media companies, including CBS (CBS), Showtime, STARZ, and A+E Networks. The new service will be available exclusively to Amazon Prime members. An Amazon Prime membership costs $99 per year or $8.25 per month. The Streaming Partners Program provides viewers with free trial subscriptions.
Additionally, Amazon is producing original content and contracted Woody Allen to direct Amazon’s first exclusive television series in 2016. Amazon has also entered into content licensing deals with Viacom (VIAB) and HBO (TWX). Amazon’s Prime Instant Video service is following in Netflix’s footsteps by entering international markets such as Japan (EWJ) and by pursuing original content.
Last year, Amazon rolled out a new initiative for its Amazon Prime Instant Video subscribers in the United States, the United Kingdom (EWU), Germany (EWG), and Austria. These subscribers gained the ability to download TV shows and movies to their Apple (AAPL) iOS and Alphabet (GOOG) Android platforms for offline viewing at no additional cost. Amazon is the first streaming subscription service to offer this ability.