App Annie Industry Analyst Ross Rubin talks about Amazon's decision to offer its video streaming separate from Prime membership, and how that could impact Netflix. Bobbi Rebell reports.
Amazon making it big lift to this it's an idiot streaming service now operate as a monthly subscription ought to be a yearly prime member. Kelly rival Netflix here with more is roster but he is a senior director of industry analysis. At at and if so what is the thinking. From the Amazon perspective on this move it about that. Well you know clearly Amazon continues to invest in this continent and it is marketing the prime video features to all a lot of its customers. Today who may not. Necessarily understand the benefit you know it's sometimes can be tough. To market individual features when you have such an all encompassing. Subscription plan as prime so. This allows them to carve out some of the value and go after some customers. Who may not have an interest in the greater offering. How that insists that explains the need for. Well clearly they were already competing in the in the video space there they're both investing in an original content. That's certainly allows both companies to. Judged the competition on on a more apples to apples basis instead of having it. Exclusively embedded into into the prime membership. It's really a lot about new user acquisition clearly prime. Kills very much to customer of that already has a significant. Relationship when Amazon wants a free shipping and other benefits. Here it allows them to move into potentially new customer bases. And what does it mean in terms of the quest for contests and this really ups the ante with respect getting the best program because now consumers are really in the states but we're transparent so unintended I am a seventh. Well you know certainly we're seeing a lot of aggressive development from a number of players there you know lose also stepping up its efforts. And and again this this allows more direct monetization. That effort so. As the business that continues to grow and can expand out beyond crime they can better justify those those acquisitions. Will it mean more expensive fees for customers as they maybe have to pay up for the better context or is this a battle maybe four. The monthly subscription fees because what Amazon is lower at this point then. Did most common Netflix subscription fee. Sure you know there's certainly a balance on on one hand. They really can't afford to drop the price too much because they have those fixed costs of the content acquisition. And and also investing in in their own original content. On the other hand you know they can go to expensive because and they become uncompetitive so. So it's a balance and it seems to be settling in and around that nine or ten dollar a month price point at least for now. Interesting relationship here IQ and I mentioned to Netflix. And uses Amazon's cloud service. Sort of the back office there for their service how does that if there any danger there to back a little complicated I mean it's already bid but what's that. Well you know the the nature of that cloud businesses that Amazon needs to be somewhat agnostic and in terms of who the customer is I mean already today. There's so many products that compete directly with their own products fired TV and and the Kindle tablet so fire tablets etc. so. Amazon you know understands that that's part of a a modern. Coop had to do business. Will they be successful in bringing an additional subscribers through this what. You know they continue to have a strong offering that they continue to invest in. Seems to have a lot of strong appeal and since you're pretty well positioned our belief and thank you so much. Our thanks to Ross Rubin an app and you got to repel this is Reuters.