Amazon’s new monthly streaming program targets Netflix

FILE - This March 20, 2012 file photo shows Netfilx headquarters in Los Gatos, Calif. Netflix on Tuesday, Aug. 4, 2015 announced it is letting new parents on its payroll to take up to a year's paid leave in a move that could pressure other technology employers to improve their baby benefits as they vie for talent. (AP Photo/Paul Sakuma, File)

NEW YORK (AP) — Amazon is taking on Netflix and Hulu with a stand-alone video streaming service, just weeks before Netflix raises prices for longtime subscribers.

New customers can now pay $8.99 a month to watch Amazon’s Prime video streaming service. Previously, the only way to watch Amazon’s videos was to pay $99 a year for Prime membership, which includes free two-day shipping on items sold by the site and other perks.

At $8.99 a month, Amazon’s stand-alone streaming service is $1 less than Netflix’s standard membership and $1 more than Hulu. Netflix said earlier this year that a “substantial number” of its longtime members who paid $7.99 monthly — and have been protected from price hikes — will now pay an additional $2, starting in May.

Amazon’s decision to break off its video streaming service could cause some defections at Netflix, wrote Wedbush analyst Michael Pachter in a note to clients.

Both companies have invested heavily in original and exclusive programing. Netflix has “Orange is the New Black,” ”House of Cards” and a couple of series based on Marvel comic characters. Amazon’s offerings include “Transparent,” ”Mozart in the Jungle” and previously-aired HBO shows. With Hulu, users can watch many current TV episodes a day after they air on a network. Hulu is also growing its exclusive offerings, with “The Mindy Project” and “Difficult People.”

Netflix declined to comment Monday. Representatives for Amazon and Hulu did not immediately respond to a request for comment.

Besides its stand-alone video service, Amazon is also offering a new pay-as-you-go option for its full Prime membership that costs $10.99 a month and comes with free-two day shipping, streaming and other perks. Amazon said users who opt to pay $10.99 monthly, instead of the $99 annual fee, can cancel at any time.

Shares of Amazon.com Inc. rose $8.23, or 1.3 percent, to $634.12 in morning trading Monday. Netflix Inc. shares fell $2.37, or 2.1 percent, to $109.14.

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