In the time since Amazon launched its streaming video service — which includes a library of free movies and TV shows for members of Amazon Prime — it has grown to become a competitor for Netflix, especially after that company angered many customers by doubling the subscription rate for customers who wanted to keep receiving DVDs by mail. But Netflix CEO Reed Hastings says he’s not worried about Amazon, and in fact, he’s not quite sure what they’re offering consumers.
“In the U.S., our content budget is about three times [Amazon's], and we’ve got about three times more content,” he tells the Wall Street Journal. “And what our customers tell us is they want Netflix to have more content, not to have two-thirds less at a lower price. That’s not that interesting a proposition for them. [Amazon has its Prime membership service] and it’s really about low-cost shipping, but why is video in there? It’s kind of a confusing mess.”
Amazon Prime costs members $79/year, as opposed to the $96/year Netflix charges to streaming-only customers in the U.S. Prime was initially a program that offered frequent customers a way to get free two-day shipping on many items.
“We can do a better user experience on video because it’s our only business,” says Hastings. “The way we do algorithms to choose which content is shown to you is much better than Amazon’s, much better than Hulu’s. They’ve got talented teams, but they’re doing a lot of other things and we’re focused on this one area.”