On Tuesday, Amazon.com, Inc.(NASDAQ:AMZN) launched Prime video subscription platform which will allow customer to add premium subscriptions like Showtime and Starz to Amazon Prime account. The update will give Prime users the ability to add over 30 over-the-top options, and create their own personal bundles. Specifically, initial partners include Showtime and STARZ are available to Prime subs for $8.99/month. But Amazon’s offerings are much more expansive, and show a significant break in direction from rival Netflix.
Netflix (NASDAQ:NFLX), which competes to varying degrees with many of Amazon's partners, has dropped to $121.10 by 3.4% premarket amid a 1.2% drop for Nasdaq futures. Amazon is down 1% to $663.05. Later on 9:46AM ET, Netflix has quickly pared its losses with the shares were down 0.6%. Netflix stock price ended up by 0.38% at $126.98.
Both Netflix and Amazon have been focusing on original content, especially over the last year. Amazon won five Emmys for its show "Transparent," and recently released a new series, “The Man in the High Castle,” to positive critical reception. Netflix, for its part, revealed that it will drastically ramp up its original content by producing 31 scripted shows next year, up from 16 this year. With Netflix pouring so many resources into original content, Amazon seems to believe it can differentiate itself with a different metric: convenience. There's been plenty of debate over the company's plan to double down on original series and add more feature films. By appearances, an already fragile relationship between Hollywood and Netflix has turned testier.
While Amazon’s play is to make itself into a content hub that can integrate many other over-the-top streaming services into itself, Netflix seems to be trying to build itself into a super-sized version of HBO.