Amazon Prime Going Monthly (AMZN, NFLX)

Retail

Published: November 6, 2012 1:09 pm

Has Amazon.com Inc. (NASDAQ: AMZN) got a deal for you! For just $7.99 a month, you get the company’s Prime free 2-day shipping service plus access to the company’s streaming video service.

For those of you who are more old-fashioned, you can pay $79 a year for Amazon Prime, including both the shipping and the video streaming. Unfortunately, that’ll cost you about $6.59 a month. Oh, wait …

Amazon is probably not trying to trip you up. Instead, the company is likely hoping to increase its competitiveness against Netflix Inc. (NASDAQ: NFLX), which offers its monthly video streaming service for $7.99. Amazon does not want to lose any customers just because they might not be able to or not want to cough up $79 all at once. And there’s really no reason to challenge Netflix’s price either.

Amazon’s new deal is about casting a wider net, not making its current Prime customers — or anyone else for that matter — an offer they can’t refuse. The monthly package is not being offered to all Amazon’s customers according to a story at MarketWatch.

Netflix shares are down 1.7% at $76.91 in 52-week range of $52.81 to $133.43.

Amazon’s shares are up about 1% at $236.86 in a 52-week range of $166.97 to $264.11.

Paul Ausick

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