Amazon's ad-supported streaming video network has been rumoured before, but the New York Post is saying it's a done deal.
The Post also says the service would operate separately from a Prime subscription, be supported by ads, and might undercut the cost of a Netflix subscription. While that estimation came from an analyst, which means it is basically worthless, it would make sense that a Netflix clone with ads would cost less than Netflix itself.
As with many things Amazon does, this lower-level video subscription service would be used as bait to lure people to ultimately sign up for Prime. In other words, if you like Transparent, but you want to see it without blocks of ads interspersed, you'd have to buy Prime. Next step, profit.
Considering Amazon has been throwing a lot of weight behind original programming as well as actively adding movies and TV shows you want to watch, this is something that sounds within the realm of possibility. [New York Post]