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Despite an aggressive push to increase its variety of TV shows and movies, Amazon isn’t planning to split off its Prime streaming video service into a standalone subscription offering, according to the company’s management team. At least not anytime soon.
Currently, Amazon offers its streaming video service as an added perk for members of its Prime membership, which costs $79 per year and includes free two-day shipping on lots of items sold on the online retail giant’s website. At its core, the Prime membership’s purpose is to make purchasing items through Amazon more attractive because people feel like they’re getting more of a deal since shipping fees aren’t factored into individual purchases.
“The bundle of benefits that come with Amazon Prime make perfect sense to offer to customers. The way that Prime Instant Video is offered today—we’re going to continue that approach at least into the near future,” Amazon Head of Digital Video Content Acquisition Brad Beale told Gigaom recently.
One reason people are speculating that Amazon will split off the Prime video portion into its own subscription service is that Netflix CEO Reed Hastings said during the company’s fourth quarter earnings, “We expect Amazon to continue to offer their video service as a free extra with Prime domestically but also to brand their video subscription offering as a standalone service at a price less than ours.”
Another reason people expect a standalone Prime video service Amazon’s aggressive pursuit of new streaming licensing agreements. In July, the company added streaming content from CBS and NBCUniversal. It added Fox Network content in September. And earlier this week, Amazon signed a deal to bring Viacom video content to Prime, which makes the Prime service’s streaming library more competitive with Netflix and Hulu.
Personally, I don’t expect Amazon to break its streaming video into a standalone service. And since the company’s main focus is to drive more sales to its retail business, it doesn’t make sense to provide ways for people to get only what they want without interacting with the main website. Right now Amazon doesn’t have to spend money promoting and marketing its Prime video for it to remain lucrative. That wouldn’t be true if it was a standalone service.