It's a major and long-awaited step forward for Amazon, which is investing heavily in original content.The shows, that have earned Amazon 16 Emmy nominations for Original Series, had previously come with a hefty up-front price tag: Usually, a $99-a-year subscription to Amazon Prime.
Prime, Amazon's membership program, is probably known best for it's other perks, like free 2-day shipping, same-day delivery and "lightning" deals and discounts. But this week's YouTube blitz could show the company is serious about using content as a way to draw a new kind of internet user to the platform.
"The challenge for Amazon is that its default model for video is still a Prime subscription, which is a lot to bite off if all you want is video," said Jan Dawson, chief analyst at Jackdaw Research. "I suspect putting the pilots on YouTube is a way to reach more users that might otherwise have no access to Amazon Instant Video, and perhaps lure some of them in with this free content."
At $10.99 a month, Prime offers access to Amazon's vast inventory of products, plus music, photo storage, restaurant delivery and more. There's even a standalone Amazon Video services for $8.99 a month. But at $7.99 to $11.99 a month, Netflix offers what analysts estimate is a slightly wider portfolio of shows, including sticky, exclusive original series like "Orange is the New Black."
Amazon recently made it clear that it has its own plans to modern classic franchises like "House of Cards," announcing it would double its video content spend in the second half of this year, and triple its spending on original content.
Amazon and Netflix did not immediately respond to CNBC's request for comment.
Michael Pachter, managing director of equity research at Wedbush Securities, has long held that "Amazon declared war on Netflix" by branding a standalone video service.
"Netflix can keep up only by spending as much as Amazon," said Pachter. "It looks like Amazon is spending $3.5 billion this year, and Netflix (on an apples-apples basis) is spending closer to $4 billion (the rest is on DVDs and content for countries where only Netflix competes). I think if Amazon keeps growing its spending, Netflix can stay ahead only by growing its own spending dollar for dollar."
Amazon has more at stake than just a rivalry with Netflix, as it hopes to fuel its "flywheel" ecosystem to drive more retail sales. Indeed, Amazon CEO Jeff Bezos has said he believes consumers will buy both services.
"When we win a Golden Globe, it helps us sell more shoes in a very direct way," he told an audience at Recode's Code Conference.
Thanks to the new free pilots, a whole new set of shoe shoppers may give Amazon Prime a second look, Dawson said.
"Interestingly, Amazon isn't just putting the pilots on YouTube but also on Twitch, which it owns. That's a sign that it sees Twitch as more than just a platform for sharing gaming videos, something it's already demonstrated with the other content it's been feeding into Twitch," Dawson said. "It's also away to reach users that typically don't pay for video content at all,especially teenagers and young adults who favor YouTube, Snapchat, and other free and ad-supported video platforms. At the end of the day, though, this is still all about Amazon's main strategy for video, which is giving people more reasons to sign up for a Prime subscription, which in turn drives ongoing growth in e-commerce."
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