December 14, 2016 / 12:38 PM / a year ago

Amazon launches Prime Video globally, leaves out China

(Reuters) - Amazon.com Inc AMZN.O launched its video-streaming service, Prime Video, in nearly every country except China on Wednesday, in its biggest challenge yet to Netflix Inc NFLX.O.

Amazon.com's logo is seen at Amazon Japan's office building in Tokyo, Japan, August 8, 2016. REUTERS/Kim Kyung-Hoon

Prime Video, home to popular shows such as Jeremy Clarkson’s “The Grand Tour” and transgender comedy “Transparent”, will now be bundled with Prime subscriptions in 19 countries including India, Canada and France.

In other regions, those who want the service will have to pay $2.99 or 2.99 euros per month for the first six months, after which the price will be doubled to $5.99 or 5.99 euros.

Subscriptions for Netflix, whose current hits include original shows “Stranger Things”, “Daredevil” and “Narcos”, start at $8.99.

Amazon has been spending heavily, sometimes at the cost of profits, on the creation and marketing of movies and TV shows.

The company hopes that people will sign up for its Prime service to watch these shows - and in turn buy more from its online store to make the annual subscription worth it.

Amazon will continue to focus on producing original content, said Tim Leslie, vice president of Amazon Instant Video, International.

Most of the original shows, including local content, will be made available everywhere, Leslie told Reuters.

The success of “The Grand Tour”, a series hosted by former “Top Gear” presenter Clarkson following his departure from the BBC, underscores Amazon’s focus on original content as it takes on video-streaming pioneer Netflix.

Netflix has been hugely successful in attracting more subscribers through the popularity of its original shows. The company took its service global in January, rolling it out in more than 130 countries.

China is the missing piece for both Amazon and Netflix in their global expansion as the world’s most populous country has stringent policies on regulations and censorship.

Slowing growth in U.S. video subscriptions and increasing competition have drive the international expansion of video streaming providers. But as they expand around the world, the need for more local content will pose a big challenge.

“We’ve made a big investment in originals in Japan, and we’re doing the same in India,” Leslie said.

Amazon Prime Video members can also download all movies and TV shows for offline viewing on mobile devices, a feature Netflix introduced late last month.

Reporting by Aishwarya Venugopal in Bengaluru and Sankalp Phartiyal in Mumbai; Editing by Saumyadeb Chakrabarty

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