Amazon challenges YouTube with video service

  • 11/05/2016
Amazon challenges YouTube with video service Inc is looking to take on YouTube as it launches a new service which allows users to post videos and earn royalties from them.

The service, called Amazon Video Direct, will make the uploaded videos available to rent or own, to view free with ads, or be packaged together and offered as an add-on subscription, the world's largest retailer announced yesterday.

Alphabet Inc's YouTube, which has more than 1 billion users generating billions of views a day, offers a similar free, ad-supported service as well as a $US10-per-month (NZD$14.68) subscription option called YouTube Red.

Users of Amazon's service will be able to make their videos available in United States, Germany, Austria, the United Kingdom and Japan.

The company has also signed up several partners for the service, including Conde Nast Entertainment, the Guardian, tech blog Mashable and toymaker Mattel Inc.

Amazon has been making a concentrated push into video.

In a client note issued earlier yesterday, Bernstein analyst Carlos Kirjner estimated that the company will spend about US$2.9 billion (NZ$4.26 billion) on video content for Amazon Prime this year.

The company's fast-growing Prime loyalty program offers original TV programming and access to its digital entertainment products such as Prime Music and Prime Video, as well as one-hour delivery of purchases, for an annual fee.

Amazon's were up 2.7 percent at US$697.94 in morning trading yesterday.

Up to Monday's close, the company's shares had risen 56.7 percent in the last 12 months.