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Amazon's launches rival Netflix service

Associated Press Associated Press 18/04/2016

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.

There will be no such price rise in Australia.

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 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.

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