Streaming Competition: Netflix and Amazon Have New Pricing Plans

Amazon announced this week that it would begin offering a streaming-video-only version of its Amazon Prime subscription service, a move that shakes up the competition between the two top streaming services as they battle for subscribers. Amazon's low-cost video-only subscription option debuts just weeks after Netflix announced that it will begin charging its long-time subscribers more for its service.

Until now, Amazon offered its Prime Instant Video streaming services only to customers who subscribed to its full Prime service, which includes free shipping on many products that Amazon sells and access to the company's music streaming catalog. The new video-only option, which will cost $8.99 per month, includes only access to streaming video and not free shipping or music.

The move is a strategic shot at Netflix, whose comparable streaming service costs $9.99 per month. Netflix customers who had subscribed to the service since 2014 had been paying a grandfathered rate of $7.99 per month, but Netflix recently announced that as of May 2016, those customers would also starting paying the higher rate.

That makes the new Amazon video option inarguably the cheaper of the two services, and positions Amazon more favorably to compete with its principal rival. Amazon also has the advantage of offering Ultra HD content with its low-cost service, an option that only comes with Netflix's higher-cost $11.99-per-month plan.