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Amazon Prime Offers $7.99 Monthly Plan

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For those still puzzling out why Amazon would bundle its subscription video-on-demand service with free two-day shipping: Amazon Prime Instant Video is now available in a monthly plan that has no connection with shipping at all.

The original plan for Amazon Prime pricing was to bundle the streaming video service as a free extra to the company's Amazon Prime shipping service: $79 per year gets members free two-day shipping on most purchases and streaming video, as well.

While it's a great deal, yearly plans aren't for everyone. Perhaps that's why Amazon is introducing a $7.99 per month option for the Prime Instant Video library. Amazon appears to be testing the new pricing out, so it isn't showing up for every buyer. Those who want it but don't see it should try a different browser.

Gaining the flexibility of monthly pricing means paying more and not getting free shipping, but it's an important step if Amazon wants to compete directly with Netflix and Hulu.

In related news, 451 Research's ChangeWave released survey results on streaming video provider market share, and found that Amazon Instant Video use is growing. While Netflix is far in the lead with an 82 percent reach among those who watch paid online video. Amazon was used by 17 percent of respondents in February of this year, a number that grew to 22 percent by September. That puts it well ahead of iTunes and Hulu Plus.

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