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Amazon CEO Jeff Bezos thinks that Amazon Prime Video doesn’t compete with Netflix, as consumers buy both the services

While the Street considers Amazon.com, Inc. (NASDAQ:AMZN) Prime Videos to be the closest competitor to Netflix, Inc. (NASDAQ:NFLX), founder and CEO of the ecommerce giant, Jeff Bezos, says that the two platform are not each other’s rivals. On day 1 of the Recode Code Conference, Mr. Bezos said that the consumers pay for both the popular services, therefore, both of them do not compete against each other.

Recode quotes the CEO: “We don’t compete with Netflix. I think people are going to subscribe to both.” The statement came merely a month after Amazon made its Prime Videos a standalone over-the-top (OTT) subscription service, allowing non-Prime members to buy its packages starting at $8.99. The move would help its subscription video on demand (SVOD) platform to directly compete against the world’s largest online TV network and possibly establish a medium to tap other international markets.

Newton, MA-based Strategic Analytics research shows that Netflix leads the market with a 53% share, way ahead of Amazon Prime Video and Hulu which have 25% and 13% shares, respectively. Interestingly, the research firm found that about 40% of American households who use SVOD services have subscribed to at least two of them, backing Mr. Bezos’ statement.

The CEO also revealed that Amazon Prime, which provides free 2-day delivery at Amazon.com, assists in driving the economies of its video division. “From a business [point of view] for us, we get to monetize that content in an unusual way,” he added.

Additionally, Amazon stopped selling Apple TV and Google Chromecast last fall as they compete with its Fire TV platform. The company is also working on smart home products, as it has “more than 1,000 people dedicated just to the Alexa and Echo ecosystem.” Since Prime Video is linked to the Prime retail platform, Mr. Bezos said that he can trim the SVOD business costs, which consist of increasing library of the original TV series.