If Carl Icahn wasn’t enough to worry Netflix, now the streaming service is getting some additional aggravation from Amazon.
The digital retailer quietly launched a $7.99 monthly version of the Amazon Prime service, which bundles TV and movie streaming with free two-day shipping for an annual fee of $79.
That will position Amazon Prime more directly against Netflix, though it is not quite the standalone launch strategy Netflix CEO Reed Hastings had been warning investors of as early as last year. Netflix already has a direct challenge from Hulu’s subscription VOD offering, Hulu Plus, and a joint venture between Redbox and Verizon will add to the competition next year.
Amazon hasn’t formally announced the monthly Prime service, which may mean it is a test as opposed to a permanent offering.
Amazon has been getting more aggressive about amassing programming for both the SVOD Prime service and its a la carte offering, Amazon Instant Video. In addition to securing key studio deals and its first exclusive arrangements, the company’s development wing, Amazon Studios, is close to ordering its first original TV series.
A monthly offering could induce more Amazon users to try Prime, which Cowen & Co. projected in February to have as many as 11 million members in the U.S. alone.