Shares of Amazon were gaining 0.1% to $338.82 in after-hours trading Thursday.
The streaming service would feature Amazon's original programming including shows such as Alpha House and Betas, and could potentially offer licensed content as well. The service wouldn't require an Amazon Prime subscription, making it free for all users.
Amazon may have difficulty getting deals for the content, however. Content providers restrict the free, solely ad-support version of Hulu to desktops, making users pay to watch the service on a TV or mobile device.
News of the service comes a few days before Amazon is expected to unveil its new set-top box on April 2. This service may not be ready in time for the device's launch, however.
Such a streaming service will help Amazon compete against Netflix (NFLX) in the streaming media market. Shares of Netflix were falling 2.8% to $354.01 in after-hours trading.
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TheStreet Ratings team rates AMAZON.COM INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate AMAZON.COM INC (AMZN) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth and compelling growth in net income. However, as a counter to these strengths, we also find weaknesses including generally higher debt management risk and poor profit margins."