firetvstick4Amazon is planning to launch an ad-supported video streaming service early next year, according to a report from the New York Post.

The service would offer users the ability to view shows from Amazon’s catalog but avoid paying the full $99 price tag for Prime, which includes ad-free access to Amazon’s Prime Instant Video catalog. It’s a move that could attract more viewers to the service, which competes with streaming offerings like Hulu and Netflix.

AmazonInstantLogoIf the service launches, it probably won’t be free. Earlier this year, the Wall Street Journal reported that Amazon had plans to offer a free video service that was supported by ads, but the company vehemently denied those rumors, saying that it had “no plans” to offer free video streaming. Still, the company has been testing video ads in some of its streams.

A lower-cost streaming service could be key to the company staying competitive with Netflix, which already offers a lower-cost standard definition streaming service for $7.99 a month, or around $95 a year. If Amazon offers its customers access to its massive catalog at a lower price point, that could be a winning combination. Amazon has some very popular shows at its disposal, including a treasure trove of HBO’s back catalog shows like “The Sopranos” and “The Wire.”

The lower-cost service would go well with the new Fire TV Stick, Amazon’s $39 media streaming stick that came out this week.

Update: A spokesperson for Amazon provided GeekWire with the following statement via email:

“We currently offer the first episode of some television shows free with ads through our First Episode Free feature on Amazon Instant Video, and there are display ads on some short videos such as movie and game trailers. We’re often experimenting with new offers and experiences for customers, but we have not announced any plans to offer an ad-supported video streaming service.”

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