Amazon's new Netflix competitor is a bad deal for most people

On Sunday, Amazon finally broke out Prime Video, its Netflix competitor, from the full Prime bundle. You can now subscribe to Prime Video on an $8.99-per-month basis without getting free two-day shipping, Amazon’s music service, or other perks.

This move brings Amazon’s video service into more direct competitor with services like Netflix and Hulu.

But a little simple maths shows that it actually isn’t a great deal unless you plan on cancelling soon. Here’s the breakdown:

  • Prime Video as a standalone service will cost $8.99 per month, coming out to $107.88 per year.
  • The complete Prime “bundle” will cost $10.99 per month, coming out to $131.88 per year.
  • Amazon Prime, the whole package, costs $99 per year.

The benefit is that you can cancel any time you want, and are only committed on a month-to-month basis. This might serve as a good move for Amazon, allowing people to dip their toes into the Prime water before upgrading to the yearly plan.

But if you are already familiar with Prime, these new plans only really make sense if you see yourself cancelling in the near future. 19% of Prime’s current subscriber base has canceled in the last year, according to research by Parks Associates.

Here’s a chart of Amazon Prime’s new pricing options:

Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

NOW WATCH: Here’s how to see how much you’ve spent on Amazon in your lifetime

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.