Netflix CEO Claims Amazon Losing $1 Billion Per Year On Streaming Video


The war of words between Netflix and Amazon continues, and this time Netflix CEO Reed Hastings is deciding to bluntly call out the world’s largest online retailer. In a recent interview Hastings said that one day, Amazon will become a real competitor for Netflix–but until then they will continue losing nearly one billion dollars a year trying to beat them at their own game.

Hastings, who made the comments during an interview in New York with Dow Jones editors claims that Amazon is losing upwards of $1 billion per year as it tries to acquire licenses to stream video content for its customers. He argues that he generated these numbers based on the perceived value of content deals that Amazon has won since the two companies began competing with one another. Netflix reported last month that it is on track to spend over $2 billion on content licenses over the coming year.

Netflix is often compared to Amazon in terms of cost versus value received and many subscribers are currently siding with Netflix and their easy and simple $8 per month streaming service. On the other hand, users who have subscribed to Amazon Prime not only receive access to TV and movie streams but also receive Prime shipping service on products purchased on the site. Amazon is believed to be planning a full roll-out of an $8 per month payment plan for Prime–which is something they are currently testing.

Despite the statements from Hastings, an Amazon spokesperson took a positive spin when replying to  the comments. “We don’t comment on our individual investments but it’s correct that Prime Instant Video is an amazing value for customers.”

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1 Comment

  1. javi
    javi November 18, 2012 at 2:40 pm

    I haven’t tried getting movies from Amazon, but my switch from Netflix to DISH came at just the right time. Icahn bought ten percent, which seems to indicate a major move upcoming, and with all the price changes last year, I’m having a much better time getting movies from DISH. A coworker at DISH told me about Blockbuster @ Home; DISH’s new movie service offers over 100,000 movies, games and TV shows, and costs less per month than Netflix. It’s easier to use, comes right to my home, and I don’t have to worry about the company changing overnight on me.

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