Amazon Prime Adds Monthly Subscription Plan, Competes With Hulu and Netflix

Amazon introduced a new pricing option for its “Prime” service this week — $7.99/month instead of the normal $79.99 a year.While basic math lets consumers know that the monthly price is more steep in the long run, the new subscription option seems to be an effort to compete more directly with Hulu and Netflix, both of which offer monthly plans at exactly the same price.Originally, Amazon Prime was a way for avid book buyers to save on shipping — the service lets subscribers get free two-day shipping. But as Amazon evolved, so did Prime. The subscription service now lets subscribers access streaming movies and TV shows.Amazon’s streaming video offerings are not as diverse or plentiful as Netflix or Hulu, but the new pricing scheme is smart. While most subscription sites try to upsell monthly subscribers into annual plans, Amazon’s new monthly plan will likely help them acquire new subscribers who don’t want to get locked into the $80 annual commitment. Thus, it’s a much better pricing model for streaming video.And the free two-day shipping will probably help compensate for the site’s more limited selection of video.Also, the option shows the site’s willingness to test — a definite best practice for anyone in the online subscription business.

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