Amazon Is Extending Prime Video's Introductory, Discounted Pricing Globally

As Amazon Prime Video fights head to head with Netflix in international markets, the e-commerce giant is playing its money card once again to win and retain customers.

Amazon is extending the introductory Prime Video offer across all global markets, a source familiar with the matter said. Amazon has since confirmed the move.

Taking many by surprise last December, Amazon announced it was making its on-demand streaming service, for which it would typically charge USD 5.99 a month, available in 242 countries and territories at an introductory price of USD 2.99 or EUR 2.99 per month for the first six months. This pricing is only for regions that do not have a Prime subscription service already available. In other regions - like India and US - Amazon Prime subscribers get the Prime Video service bundled in.

That discounted offer will now last until the end of the year, the e-commerce giant told Gadgets 360. "We are extending our introductory price of USD 2.99 (or EUR 2.99) per month to thank our early customers," a spokesperson said.

"Prime Video members will continue to receive this price until the end of the year and will renew at USD 5.99 (or EUR 5.99), thereafter," the spokesperson added. New users will also be able to avail the introductory offer throughout this year.

The move to extend the markdown period will help Amazon retain customers as it works on broadening its content catalog, a key area where it trails its California-based rival Netflix, analysts said.

"Amazon is likely seeing traction with the promotion and so that is why it is continuing it. Streaming entertainment is not a necessity. It is something sold on the quality of the content as well as the price," Ross Rubin, principal analyst at Reticle Research told Gadgets 360.

Paul Verna, principal analyst at marketing research firm eMarketer echoed Rubin’s thoughts, adding, "Amazon is more focused on customer acquisition than revenue generation. The benefits of signing up Prime subscribers tend to come from increased e-commerce, brand loyalty, and simply getting people into the Amazon device-content-merchandise ecosystem."

But should this worry Netflix, which charges $9 to $10 for its monthly subscription? Analysts don’t think so. On the contrary, Amazon’s move to keep Prime Video’s prices low suggests “it is struggling to make headway against Netflix despite the introductory pricing,” Jan Dawson, chief analyst and founder at Jackdaw Research told Gadgets 360.

While it’s unclear which service has a larger catalog of movies and shows, the general consensus among customers is that Netflix’s offering is larger and more importantly better. Netflix also has more original shows available on its service.

"It’s worth remembering that Amazon’s video offering in many markets is pretty poor compared [to] what Netflix offers," analyst Dawson said, adding that Amazon is yet to walk the tough path of investing in local content across international markets.

For its part, Amazon has begun aggressively pushing to grab local content in select markets including the likes of India. On top of this, in some places where the e-commerce giant has a substantial footprint, Prime Video is available as a complimentary service with a Prime subscription.

"In India, Prime membership continues to be at Rs. 499 per year. There is no change in pricing for Prime IN membership," an Amazon spokesperson said. In Canada, the company maintains several enticing deals, including student discounts.

But at some point, Amazon will hope that it is able to convince enough customers to pay the full-price for Prime Video. And that remains the big question.

"There might be a small portion of the population in India and elsewhere that chooses between Amazon and Netflix on the basis of cost, but most users understand that, after Amazon’s introductory offer expires, the price differences between the services will narrow," eMarketer’s Verna added.