Seeking Alpha

Amazon (AMZN) is losing $500M-$1B/year on its Prime Instant Video service, according to...

Amazon (AMZN) is losing $500M-$1B/year on its Prime Instant Video service, according to Netflix's (NFLX) Reed Hastings, who bases his (broad) estimate on the cost of content deals Amazon has won when competing against Netflix. Separately, Hastings has declared (in a clear message to Carl Icahn) Netflix will remain independent. Meanwhile, Amazon appears to have ended a test for a $7.99/month pricing option for Prime; its site is only showing the traditional $79/year option. (ChangeWave survey)
Comments (3)
  • mogando
    , contributor
    Comments (313) | Send Message
     
    So AMZN loses money on each KindleFire sale, then lose money on the Prime service ?? Do they make *any* money other than shipping books ?
    16 Nov 2012, 04:28 PM Reply Like
  • Joe Eifrid
    , contributor
    Comments (336) | Send Message
     
    Last quarter they lost money. They gave guidance they may lose some this qtr. They only have a 1% operating margin as it is, and UPS and FDX are increasing their shipping cost by nearly 5% starting in January. Something will have to give. They have to raise prices some where.
    16 Nov 2012, 07:36 PM Reply Like
  • scott trader
    , contributor
    Comments (4375) | Send Message
     
    nflx the poison pill that keeps on giving....scramble shorts .....Go Carl....
    24 Nov 2012, 09:49 AM Reply Like
DJIA (DIA) S&P 500 (SPY)