If you asked that question a week ago, when Seattle-based Amazon.com, Inc. (Nasdaq:AMZN) raised its annual fee for Amazon Prime to $99 from $79, you might have heard a far different answer. But those upset by the company’s March announcement that the popular streaming movie and T.V. service (that also offers free two-day shipping) would see a price hike April 17 had to wait less than a week for that extra $20 seem like money well spent.

Amazon’s Prime Instant Video will now offer select HBO original programming to non-HBO subscribers for the first time – all for just $8.25 a month. That means exclusive access to older show like The Sopranos, Deadwood, The Wire, Six Feet Under, Eastbound & Down, Enlightened and more. There will also be access to select seasons of Treme, Boardwalk Empire and True Blood. And there will be more to come, as well, as part of the multiyear deal between Amazon and New York-based Time Warner Inc.’s (NYSE:TWX) HBO (fans of Game of Thrones and True Detective will have to wait, though). Amazon also has exclusive rights to Downton Abbey, Justified, and Orphan Black, not to mention special access to the Kindle Owner’s Lending Library.

Compared to the $15.95 you’d have to shell out every month in addition to your monthly Time Warner Cable bill for 20 HBO channels, on HBO On Demand and HBO GO, or the $19.99 for a similar package via New York-based Verizon Communications Inc.’s (NYSE:VZ) FiOS (but for 14 channels), that sounds like a pretty good deal.

Netflix Misses Out

Even compared to Los Gatos, Calif.-based Netflix, Inc.’s (Nasdaq:NFLX) $7.99 streaming service, which now boasts popular shows like House of Cards and Orange Is the New Black, Amazon Prime’s HBO catalog stands up very well. It should be note that with this deal Netflix has missed out on offering HBO content, which would have made its coming price hike easier to swallow.

One more player in the space, Hulu, a joint venture of NBC Universal Television, Fox Broadcasting Co. and Disney-ABC Television Group., charges $7.99 for streaming its movies and T.V. shows, but is a relative lightweight with 3.3 million subscribers compared to Netflix’s 33.1 million U.S. subscribers.

The Bottom Line

Amazon Prime may cost 25% more, but for the price of a glass of wine you can binge on much of HBOs back catalog, have your Amazon purchases delivered fast and occasionally read a free book.

Related Articles
  1. Stock Analysis

    Netflix: Should You Buy Or Hold Or Sell?

    Ultimately, an investor has to trust the decisions and strategies of the company’s management. History is on the side of CEO Hastings, who seems to have a knack for both surprising and pleasing ...
  2. Fundamental Analysis

    How Original Series Shake up the TV Business Model

    Two decades ago, a network could make a decent profit airing "Full House" reruns. Now viewers expect CGI dragons, A-list film stars, and complex character development. Have mercy!
  3. Investing News

    Traditional Media Suffers, Cord Cutters Win

    Last week, a majority of media stocks including Time Warner, Walt Disney, CBS Corp., Viacom, among others, took a hammering as their stock prices declined by roughly 7% amid a slowdown in the ...
  4. Stock Analysis

    3 Stocks You Wish You Had Bought in January

    Learn about three stocks investors wish they had bought in January of 2015 due to their performing better than the overall market.
  5. Investing

    5 Companies With Hot Summer Earnings

    Some companies have strong earnings year round, while others see a seasonal spike in revenue during different times of the year.
  6. Stock Analysis

    Netflix Will Soon Be Worth More Than Direct TV

    Understand the similarities and differences between Netflix and DirectTV. Learn about four key reasons why Netflix will be worth more than DirectTV.
  7. Economics

    These are the S&P's 5 Most-Shorted Stocks

    Shorts are betting heavily against these five stocks, but a closer look shows a different outlook on some of them.
  8. Stock Analysis

    Netflix's Future Growth: Greater Than You Think?

    The potential for Netflix could be considerably greater than you think.
  9. Investing

    Is Pandora Set For A Rebound?

    Pandora stock is showing signs of a rebound. The beaten-down stock has picked up after the release of 2Q '15 results and the outlook seems promising.
  10. Stock Analysis

    How Movie Theater Companies Are Combatting Netflix

    Understand why Netflix is a threat to major movie theater companies, and learn how movie theaters are fighting back against the digital media giant.
RELATED TERMS
  1. No results found.
RELATED FAQS
  1. How are HBO, Amazon and Google working to overtake Netflix?

    Netflix (NFLX) is one of the largest distributors of "on demand" movies, TV shows and media, as well as DVD rentals. The ... Read Full Answer >>
  2. Who are Disney's (DIS) main competitors?

    The Walt Disney Company (DIS) has built a diverse empire since its beginning in the 1920s, creating a huge range of lucrative ... Read Full Answer >>
  3. How did Rupert Murdoch make his fortune?

    Rupert Murdoch made his fortune in the media business, initially in newspaper acquisition and turnaround and later in broadcast ... Read Full Answer >>
  4. What is expected to happen to Rupert Murdoch's empire after his death?

    Multibillionaire Australian-American business magnate and media mogul Rupert Murdoch, founder, chairman and CEO of News Corp ... Read Full Answer >>
  5. Which industries can benefit the most from venture capital?

    In terms of attracting venture capital, a 2013 report from advisory firm PwC indicated that companies involved in technology ... Read Full Answer >>
  6. What is a power ratio?

    A power ratio is a method used by media companies to measure revenue performance compared to the audience share it controls. ... Read Full Answer >>

You May Also Like

COMPANIES IN THIS ARTICLE
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!