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Amazon Challenges YouTube With New Online Video Service

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May 10, 2016, 10:47 AM ET
Amazon Video's 67th Primetime Emmy Celebration
LOS ANGELES, CA - SEPTEMBER 20: Founder and CEO of Amazon.com Jeff Bezos arrives at Amazon Video's 67th Primetime Emmy Celebration at The Standard Hotel on September 20, 2015 in Los Angeles, California. (Photo by Amanda Edwards/WireImage)Photograph by Amanda Edwards — WireImage/Getty Images
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Amazon.com launched a service on Tuesday that allows users to post videos and earn royalties from them, setting up the world’s biggest online retailer to compete directly with Alphabet’s YouTube.

The service, called Amazon Video Direct, will make the uploaded videos available to rent or own, to view free with ads, or be packaged together and offered as an add-on subscription.

YouTube, which has more than one billion users generating billions of views a day, offers a similar free, ad-supported service as well as a $10-per-month subscription option called YouTube Red.

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Users of Amazon’s service will be able to make their videos available in United States, Germany, Austria, the United Kingdom, and Japan.

The company has also signed up several partners for the service, including Conde Nast Entertainment, the Guardian, tech blog Mashable, and toymaker Mattel.

Amazon has been making a concentrated push into video.

In a client note issued earlier on Tuesday, Bernstein analyst Carlos Kirjner estimated that the company will spend about $2.9 billion on video content for Amazon Prime this year.

For more about Amazon’s Twitch streaming service, watch:

Amazon recently launched a monthly subscription to the program for $10.99 and plans to offer its video streaming service as a standalone service for a monthly fee of $8.99.

The company’s fast-growing Prime loyalty program offers original TV programming and access to its digital entertainment products such as Prime Music and Prime Video, as well as one-hour delivery of purchases, for an annual fee of $99.

Amazon’s were up 2.7% at $697.94 in morning trading on Tuesday. Up to Monday’s close, the company’s shares had risen 56.7% in the last 12 months.

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