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Amazon Fires Major Shot at Netflix With Monthly Video Subscription Option

Amazon's (AMZN - Get Report) just-announced move into the monthly subscription business opens up new doors to a fresh set of potential customers, but it may not result in as many new subscribers as some think.

The Seattle-based company said Sunday it would begin offering consumers the ability to access its services on a month-by-month basis. Its new Prime Video, a standalone subscription for its television and movie collection, is priced at $8.99 per month, one dollar less than Netflix's most popular streaming option for new customers.

In addition, Amazon will also be selling its bundle of Amazon Prime services, including free shipping, a music library and video content, for $10.99 a month (it was previously only available through a $99 annual upfront subscription).

"I think it's a brilliant move on their part," said Shahid Khan, co-founder of Mediamorph, a New York-based media industry software and data provider, in a phone interview. He explained that the maneuver provides another way for Amazon to monetize the content and services it has invested huge amounts of money in developing and acquiring, beyond just the annual subscription to Prime and pay-per-view options for video content.

"This sort of is a new business model that will allow them to offer the service and that content to a whole new set of other...