In the video below Fool portfolio manager Matt Argersinger and managing editor Eric Bleeker discuss tech events across the past week.
In this segment, the two discuss The Wall Street Journal's report that Amazon (Nasdaq: AMZN) is considering a video streaming service that would be ad-supported. Currently, Amazon's video is part of the subscription fee for its Amazon Prime service.
Online video is an attractive space right now for advertising. Cost analysis firm SQAD pegs the advertising cost for reaching 1,000 viewers online at $23.03, while advertising on cable channels costs $15.63 per thousand viewers. The attractive ad rates in online video has brought its share of attention to the space.
Yet, as Eric notes, it's also a space where ad rates could be far more erratic than long-established norms on television. That makes basing business decisions on today's video rates riskier, especially relative to the consistency of a plan like Netflix's (Nasdaq: NFLX), which sets a stable recurring monthly revenue stream.
To see Eric and Matt's full thoughts, watch the video below.
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Eric Bleeker, CFA has no position in any stocks mentioned. Matthew Argersinger owns shares of Amazon.com and Netflix. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.