Amazon ends its $8 per month subscription trial for Prime OTT streaming service
Michelle Clancy | 20-11-2012
Despite rumours that Amazon would look to take on Netflix and Hulu directly with an $8 monthly fee for its online video streaming service, Amazon Prime, the e-tailer has concluded its trial of the model, and has gone back to the $79 up-front annual fee for all users.
As an Amazon spokesperson told All Things D: "We regularly test new options for our customers. At this time, we've completed our test and are no longer signing up new customers for Amazon Prime monthly memberships."
Amazon has been looking to leverage Prime to capitalise on the thirst for over-the-top (OTT) content, particularly considering that it's more than an online rental service. It also offers one free e-book per month from the Kindle Owners' Lending Library, along with free two-day shipping on any purchases. Amazon places an emphasis on the shipping perk as an excuse for the $79 price tag — it's easy to make the ROI case if one shops often at Amazon. It's a business model approach that hedges its bets and in that, sets the company well apart from Netflix.
"We believe they are wedded to video within Prime and are simply against the idea of separating out a streaming video service," said researchers at BTIG in a recent report. "Amazon wants to drive Prime, utilising video streaming as yet another 'sweetener' to induce subscriptions. Amazon appears to be taking a methodical approach to dialing up its investment in Prime streaming video, with each content investment measured against the growth in Prime subs, churn and lifetime value of a sub."