Netflix CEO Reed Hastings estimates that Amazon is spending up to $1 billion a year on streaming content for Amazon Prime.
Hastings (pictured), who spoke with Dow Jones editors, said he was basing that stat on deals in which Netflix and Amazon have competed head to head, according to AllThingsD. Hastings also believes Amazon splits the spending fairly evenly between the U.S. and Europe, where Amazon runs the Lovefilm streaming service. Amazon reps could not be reached for comment about the claim.
Netflix will pay about $2.1 billion acquiring content this year. The company faces competition for such content not only from Amazon but from Hulu as well. Amazon recently increased competition with Netflix by offering its Prime service -- which includes streaming -- for a $7.99 monthly fee. That's the same price as Netflix's streaming service and an alternative to the $79 annual rate Amazon charges for Prime.
Though Amazon's share of Internet viewing traffic in September was only 1.75% vs. 33% for Amazon according to Sandvine (Hulu's was 1.38%), Hastings says Amazon is "the best competitor we've ever faced."