Amazon.com working on streaming service to combat Netflix

According to an unconfirmed report in The Wall Street Journal Monday, Amazon.com is in the early stages of developing a subscription streaming service that will compete with Netflix’s “Watch Instantly.” Citing anonymous sources, WSJ reports that the service will look to undercut Netflix’s offering, though no other points of differentiation were mentioned.

Amazon.com Inc. is developing a Netflix-like subscription service that would offer TV shows and movies, according to people familiar with the matter. That service would be included as a bundle with its Amazon Prime shipping service, which costs $79 a year, those people said.

Amazon Prime gives members free two-day shipping on all Amazon.com orders. It also offers overnight shipping for $3.99 per item. Lumping in streaming movies and TV shows for free with this unrelated service would be a peculiar move at best, though it would mirror Netflix’s original strategy, in a way. Though the company recently launched a streaming-only plan for $7.99 per month, Netflix first introduced Watch Instantly as a free add-on for its DVDs-by-mail service. At $79 per year, Amazon.com’s service would be $17 less expensive per year than Netflix’s least expensive streaming package.

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