Amazon Video Streaming Service Could Cripple Netflix

What would Netflix do if a competitor offered its video content for free?

The rumors of Amazon launching a free alternative to its popular Prime service are starting up again after a series of outlets have reported that the online retail juggernaut is introducing a new service next to its existing $99 video service.

According to the New York Post, the company may soon roll out a free video service supported by advertisements, which some say is an attempt to overtake its chief rivals, Hulu and Netflix, as it would undercut the $7.99 offer from the ladder.

“If they do an ad-supported service, they will decouple it from Prime and that is a Netflix killer,” Wedbush Securities analyst Michael Pachter said. “It won’t be $99 a year. Who wouldn’t switch if you were poor or you’re a cord-cutter?”


One person close to the situation told the newspaper that another purpose of the initiative is to attract individuals into subscribing to its Prime membership. In other words, an up-sell move.

In March, the Wall Street Journal reported similar news, but Amazon officials emphatically denied it to Variety. “We’re often experimenting with new things, but we have no plans to offer a free streaming-media service,” said a company spokesperson.

Of course, from Amazon’s perspective, there would be a lot more positives than negatives. One of the benefits would be that it already sells advertising space to an array of media properties, while also promoting its wide range of products and services in the videos. Other rumors suggest that the retailer could be permitting advertisers to enter its realm as brands have already been marketing in some of its shows.

Amazon has yet to officially comment on the story.

It could be an interesting narrative next year if Amazon does in fact install a free service because it could seriously hurt Netflix and at the same time boost internal sales.