Amazon could soon have a new weapon in its war against Netflix, as the online retailer is supposedly in the process of developing an ad-supported streaming video service. That makes it one of the cheapest streaming services out there.
According to a report in AdAge based on unnamed sources in entertainment and advertising, the company is talking with a range of potential content partners across the film and TV landscape about a companion to the subscription version of Prime. Amazon may also give content creators their own channels. Already sensing that they created a monster by taking large checks from SVOD services in exchange for their content, they are also locked in a struggle with MVPDs over the carriage of their networks in a world of cord-shaving and re-bundling. There is likely to be one stark difference between the two, however. As of this July, Amazon is believed to have 85 million customers signed up for its Prime service in the U.S.; numbers from June indicate that Netflix has about 50 million subscribers there, while cable companies count about 48.6 million subscribers nationwide in total.
The news arrives in an environment increasingly populated with new players to the streaming video game, including CBS All-Access, Facebook's Watch service, or the upcoming streaming platforms from Disney and Apple. The company was hotly tipped to be preparing such a service back in 2014, although that never came to fruition, so the new rumours should be taken with a pinch of salt.
So how can Amazon get more eyeballs on their (very expensive) content?
It's not just about getting ads in front of customers, however.
It's not the first time a company has attempted to offer premium content using ads to replace a monthly subscription fee. In addition to directly monetizing via ads, they claim that Amazon may consider sharing both audience data and that ad revenue with content creators/studios. The service generally costs Rs 999 in India and $99 in the U.S., and is ad-free.