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Amazon's stand-alone streaming targets Netflix

<p>Amazon is going toe-to-toe with video-streaming service Netflix.&nbsp;</p><p><a href="http://www.amazon.com/Amazon-Prime-One-Year-Membership/dp/B00DBYBNEE" target="_blank">On Sunday</a>, Amazon introduced a monthly subscription service for Prime. Before that, the only way to get access to Amazon Prime was to purchase an annual membership for $99.&nbsp;</p><p>Amazon&#39;s monthly price sits at $8.99, including high-def quality when it&#39;s available. That&#39;s a bit more expensive than Netflix&#39;s most basic plan $7.99 without HD video. But if you want HD on Netflix, it&#39;ll cost you $9.99, a dollar more than Amazon&#39;s price.</p><p>Amazon unveiled its new service plan one day before the release of Netflix&#39;s first-quarter earnings report.</p><p>Amazon and Netflix have been eyeing each other in an original-video streaming race of sorts.&nbsp;</p><p>Amazon&#39;s seen success with original&nbsp;<a href="https://www.youtube.com/watch?v=Xclds2kDf0g" target="_blank">shows like &quot;Transparent&quot;</a>&nbsp;and &quot;The Man in the High Castle.&quot;&nbsp;</p><p><a href="http://mashable.com/2016/04/17/amazon-prime-video/?utm_cid=hp-hh-sec#_Jvp311Quiqc" target="_blank">But as Mashable points out</a>, &quot;It still hasn&#39;t managed to garner the stunning success of Netflix hits like House of Cards, Orange is the New Black and Daredevil.&quot;&nbsp;</p><p><a href="http://www.investors.com/news/amazon-com-has-more-u-s-streaming-subscribers-than-netflix/" target="_blank">By the end of 2015</a>, Amazon Prime reportedly had 54 million U.S. subscribers roughly 10 million more than Netflix.</p><p>But while Amazon is outpacing Netflix in potential viewers, according to&nbsp;<a href="http://www.investors.com/news/amazon-com-has-more-u-s-streaming-subscribers-than-netflix/" target="_blank">Investor&#39;s Business Daily</a>&nbsp;it&#39;s still behind Netflix on&nbsp;<i>actual&nbsp;</i>viewers. One reason: Not everyone who buys the $99 Amazon Prime membership is necessarily using it for video streaming.</p><p>Prime&#39;s $8.99 plan doesn&#39;t include free shipping, although the company is now offering a $10.99 monthly plan that does.&nbsp;</p><p><i>This video includes clips from&nbsp;</i><a href="https://www.youtube.com/watch?v=Q1AADPOdD78" target="_blank"><i>Amazon</i></a><i>&nbsp;and&nbsp;</i><a href="https://www.youtube.com/watch?v=8QnMmpfKWvo" target="_blank"><i>Netflix</i></a><i>&nbsp;and images from&nbsp;</i><i><a href="https://www.flickr.com/photos/flashpro/4156535452/" target="_blank">flash.pro / CC BY 2.0</a></i><i>&nbsp;and Getty Images.</i></p>
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NEW YORK - Amazon.com Inc. is taking on Netflix and Hulu with its own stand-alone video streaming service, just weeks before Netflix raises prices for longtime subscribers.

New customers can now pay $8.99 a month to watch Amazon's Prime video streaming service. Previously, the only way to watch Amazon's videos was to pay $99 a year for Prime membership, which includes free two-day shipping on items sold by the site, and other perks.

At $8.99 a month, Amazon's stand-alone streaming service is $1 less than Netflix's standard membership and $1 more than Hulu's basic subscription.

Netflix said earlier this year that a "substantial number" of its longtime members who paid $7.99 monthly — and have been protected from price hikes — will now pay an additional $2 starting in May.

Amazon's decision to break off its video streaming service could cause some defections at Netflix, wrote Wedbush analyst Michael Pachter in a note to clients.

Both companies have invested heavily in original and exclusive programing. Netflix has "Orange is the New Black," "House of Cards" and a couple of series based on Marvel comic characters. Amazon's offerings include "Transparent," "Mozart in the Jungle" and previously aired HBO shows. With Hulu, users can watch many current TV episodes a day after they air on a network. Hulu is also growing its exclusive offerings, with "The Mindy Project" and "Difficult People."

Netflix Inc. declined to comment Monday. Representatives for Amazon and Hulu did respond to a request for comment.

Amazon may be a rival, but Netflix is also an Amazon customer. The Los Gatos, California-based streaming company uses Amazon Web Services to store its content and help run parts of its site and apps.

Besides its stand-alone video service, Amazon is also offering a new pay-as-you-go option for its full Prime membership for $10.99 a month and comes with free two-day shipping, video streaming and other perks. Amazon's website said that users who opt to pay $10.99 monthly, instead of the $99 annual fee, can cancel at any time. The $99 a year option remains the cheapest way for most people to get both free two-day shipping and video streaming, equaling about $8.25 a month.

Shares of Seattle-based Amazon.com Inc. rose $5.22 to $630.11 in afternoon trading Monday. Netflix Inc. shares fell $4.44, or 4 percent, to $107.07.

Associated Press 2016
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