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Is Amazon’s video strategy working?

Amazon Channels

Amazon is filling out the content available through Prime Video by adding originals and a la carte partner channels. But is the huge breadth of content available engaging viewers?

Amazon is taking a strikingly different approach to Prime Video than rivals such as Netflix and Hulu are with their services. Rather than bundle content together into a single offering, it is providing most of the video in channels that customers must subscribe to separately. It is working very hard to build up the number of channels available to cover every niche and content genre a viewer could possibly want.

Filling out the Channels offering

There are already 120 content services available through Amazon Channels. The company continues to press to expand that list. It is rumored to be in negotiations with “dozens” of smaller cable channels to buy them. TV channels providing content with unencumbered rights (rights that aren’t locked into exclusive distribution agreements) are of the most interest. Amazon will be able to launch them quickly to a global audience as part of Channels.

Amazon is not just waiting around for other providers to fill out the content available through Prime Video. It is working with companies directly to fill out important genre categories. For example, animated content creator Genius Brands International is partnering with Amazon in the creation of a channel offering targeted at children. Kids Genius Cartoons Plus! will be available Thursday to Amazon Prime members for $3.99 per month.   Genius properties such as Baby Genius and Thomas Edison’s Secret Lab will be available as well as non-Genius shows such as Inspector Gadget and Carl Squad.

Building the library of included content with originals, sports

Amazon recognizes that a large collection of content available as part of a basic subscription is critical to success. It gives customers a no-commitment reason to go to the video portal. Once there, Amazon can use its marketing muscle to get them to subscribe to other content. That is why it has committed to spending $4 billion this year on original content. It is spreading the investment around in genre’s like comedy (The Tick), drama (Mozart in the Jungle), and Crime (Bosch.)

It is also plunging into the world of premium sports. Amazon members will be able to watch ten Thursday football games this season, starting this week with the Bears versus Packers. This is the first time Amazon has streamed live content as part of Prime Video membership. It will be a test of the home-grown streaming platform that Amazon uses, as live streaming continues to be challenging for providers.

Is Amazon’s strategy working?

Why people subscribe to Amazon PrimeAmazon doesn’t provide any specifics on how many people are watching the content it provides through Prime Video. Luckily, there are other data sources we can draw on to assess how well it is doing.

Last year, Clearleap reported that 75% of Amazon Prime members say they watch video available through the platform. Most, however, see Prime Video as a nice bonus, not the main reason to subscribe. Still, if most of the 66 million Prime members are using the video apps that is certainly a big win for the company. Unfortunately, engagement still lags well behind other online video providers.

viewing hrs per month Netflix YouTube Amazon HuluAccording to comScore, Netflix and Hulu are used more than twice as much as Amazon Video. Hulu streaming households watch 28 hours and 54 minutes a month, while Netflix homes watch 26 hours and 54 minutes a month. Amazon video streaming homes watch just 10 hours and 42 minutes a month.

This data strongly suggests that Amazon customers start looking for video somewhere else before they turn to Prime Video. For Amazon to be successful, it will need to reposition Prime Video as the first place its customers turn to when they want entertainment video on television.

Why it matters

Amazon is trying to establish Prime Video as a platform its Prime members turn to first when they want to watch something.

It is combining a basic tier of quality content with a large array of a la carte channels to build out a 21st-century approach to pay television services.

Data suggest it has a long way to go to establish Prime Video as a primary video portal.

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