Could A Free Amazon Streaming Service Threaten Netflix?

The WSJ reports that Amazon is considering launching a streaming media service that would be supported by advertising. Does Netflix have anything to fear?

Matthew Argersinger
Matthew Argersinger and Eric Bleeker
Apr 1, 2014 at 9:10PM
Technology and Telecom

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.