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Amazon Ponders New Challenge to Netflix in Streaming Market (Report)

CEO Jeff Bezos may spin off its Amazon Instant Video as a separate service

Amazon is looking to expand and enhance its video-streaming service in what would amount to a direct challenge to Netflix, according to a report in the New York Post.

The Post’s Claire Atkinson writes that CEO Jeff Bezos may spin off “Amazon Instant Video,” which launched last February, as a “standalone, subscription-based operation.”

At the moment, subscribers to Amazon Prime, who pay $79 for unlimited shipping, get the streaming service as an added bonus. Prime has more than 7 million subscribers, according to analyst estimates, well short of Netflix’s more than 20 million.

Amazon also has a paid on-demand movie and TV service, but this would be something entirely different.

Also Read: Netflix Hit With Class-Action Suit Over Stock Plunge

There have been rumblings about Amazon taking a greater plunge into the streaming market given its wealth of content, its massive user base and Netflix’s recent struggles.

Ever since Netflix first alienated its consumers last summer with a price hike – ruining a perfect record of consumer satisfaction – the market seemed to open for new challengers. That door swung a bit wider after Netflix and Starz failed to agree to terms, further limiting the service’s movie offerings.

At the moment, Amazon has deals with the likes of CBS, Fox, Disney and NBCUniversal.

Netflix announces its quarterly earnings today, the first full quarter since the price hike and attempted spinoff of its DVD service. Its share price has plummeted over the past several months, though many industry insiders told TheWrap that it had been overvalued.

One wouldn't expect the earnings report to sway Amazon one way or the other, but a little more intel couldn't hurt.