Is Amazon's International Expansion A Shot At Netflix?

Is Amazon.com, Inc. AMZN's international expansion a shot at Netflix, Inc. NFLX? Wedbush analysts seem to think so after the company announced Wednesday it was expanding Amazon Prime Video to over 200 countries and territories.

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Amazon has expanded its Prime Video service for free to subscribers in Belgium, Canada, France, India, Italy and Spain, as well as enabling Prime Video as a paid standalone service throughout the world.

Netflix took the same strategy earlier in the year with its own international expansion.

“We estimate that Amazon is spending $3.5 billion on original content in 2016, which to us implies it will spend an additional $1 billion on international original content. We think that Amazon’s spending on originals will continue to push content costs higher, negatively impacting Netflix,” said Wedbush.

Wedbush believes Netflix’s 2017 net subscriber addition estimates may be at risk now that Amazon has taken direct aim and is utilizing similar tactics that led to Netflix’s rise as the dominant player in streaming.

Wedbush's Commentary

“While we do not expect existing international Netflix customers to defect in favor of Amazon’s Prime Video offering, we do think that future subscribers are up for grabs and we think as many as 20–40 percent of future SVOD consumers will choose Prime Video over Netflix given the more compelling price point,” added Wedbush.

Exclusive and original content have become fierce, as all the streaming services are opting for this strategy and shifting away from licensed content. Amazon is looking to capitalize on its strong user base, by allowing users to gauge sentiment of pilot episodes before green-lighting them for full seasons.

Expect more high profile deals to come in the near future. Netflix has stated it will spend $6 billion on content in 2017.