Industry concern is rising that a few large aggregation services will replace the open market for video services on the web. Amazon is emerging as a likely candidate and has just enlisted Comcast to help it.
Concern rising for the open market for TV content online
Graeme Mcmillan wrote a very interesting piece for The Verge where he pointed out that Netflix, Amazon, and Comcast Xfinity are accidentally re-creating cable TV. His piece reflects a concern that the distribution of premium video online will end up being controlled by a few big companies.
Early last year, Digital TV Europe asked a group of 380 European digital TV executives which company would have the biggest impact on digital video distribution over the next two years. Amazon was the hands down winner with 27% followed by Netflix with 21%. No other company was even close. I suspect if we asked the executives the same question again today Amazon would be far ahead of every other company. Here’s why.
Amazon fixes SVOD fragmentation
The primary leverage point for Amazon is discovery. It is very hard for consumers to discover:
- A service they may be interested in subscribing to
- Shows and movies of interest across many services.
Amazon Channels, the retail giants SVOD aggregation platform, is proving so useful to SVOD services because it helps to solve problem number 1. CBS’s CEO heaped praises on Amazon last week in helping it grow subscribers far ahead of his expectations.
Amazon users like Channels because it helps to solve problem number 2 for them. They can search across many SVOD service from one place.
The problem is, Amazon’s solution in effect creates a separate, private market for video services. SVOD services can only be found that have agreed to Amazon’s terms; content can only be found that is a part of the ecosystem.
Comcast helping Amazon take its video business
At first glance, it seems that Comcast is looking to emulate Amazon for its 22 million video subscribers. It is integrating services like Netflix and CuriosityStream into the X1 experience. Customers can use existing accounts, sign-up for service, and search for content with the X1 voice remote.
At the beginning of the month, Comcast announced it would be the first operator to integrate Amazon Prime Video onto its set-top boxes. Bringing Amazon original shows like Sneaky Pete and The Grand Tour to X1 sounds like a good idea. However, Comcast didn’t stop there.
Incredibly, Comcast will also allow Amazon customers to watch content from more than 160 add-on Prime Video Channels. These add-on channels include HBO Now, Showtime, and Starz, which Comcast also sells as premium channels direct to its customers. The cable giant will even allow Amazon customers to rent or buy movies through Amazon, even though it too provides movie rentals and purchases.
Far from emulating the Amazon Channels models, Comcast seems intent on helping Amazon steal its video business!
Can Amazon control TV on the web?
The worry about a single company emerging that dominates TV online is a real one. The scary thing about the web is that it does seem to favor one company coming to dominate one function. Some examples of this are Amazon for retail, Google for search, YouTube for video sharing, and Facebook for social media.
Mr. Mcmillan is concerned that Netflix and Comcast Xfinity have the potential to dominate online TV. However, it is Amazon that seems to have its eyes set firmly on the role of TV aggregator for the web. Moreover, it is the strategy and muscle to make it happen.
Why it matters
Industry concern is rising that a few large aggregation services will replace the open market for video services on the web.
The concern is real. Amazon is making all the right moves to become TV aggregator for the web.
It is even out-maneuvering potential competitors like Comcast.