The recent launch of Amazon’s new Amazon Video Direct (AVD) distribution platform – which allows video content owners of all sizes the opportunity to monetise their content in multiple ways – can be seen as an extension of their platform approach to retail, according to research firm IHS’s technology research group.
Jonathan Broughton, senior analyst for home entertainment at IHS Technology, believes the online retailer has historically performed so well because “they have the ability not to make decisions about what needs to be produced and sold on the site, they get everyone else to do that for them. [With AVD] they’re essentially taking the same retail principles that they’ve been so successful with, and applying them to video.”
Broughton explains that until now, video content owners have had to opt for different online distributors if they wanted to adopt different business models. Now, users of the new Amazon service can not only generate revenue using advertising, rental or purchase, but are able to offer subscription models alongside, either by becoming part of Amazon Prime, or by adding their own subscription channel to the mix. These various options can all be used singly or in combination.
“Amazon has given you a huge array of various business models that you can use,” says Broughton – but he nevertheless believes that the most important aspect of the service isn’t just that “you can pick and choose, but you get a huge amount of feedback as well. So when you create an account with them and upload your content, you basically get a dashboard which tells you how well your content is performing on each of the various business models that are offered.”
This is in sharp contrast to other SVOD services, like Netflix, where studios lack visibility about how movies and TV shows are performing on SVOD, hampering their ability to negotiate optimal content deals (see previous story).
AVD includes reporting what is being watched, how long viewers remain engaged, and how this consumption behaviour varies by market and geography. Broughton believes this will allow both established and up-and-coming content publishers to test and tailor the content offered in various locales and, over the longer term, to maximize usage and revenues.
Despite such benefits, Broughton says the feedback IHS has received so far from video content owners about the new platform is mixed, with producers of premium content unsure about whether their own wares might be “diluted by various things coming through on Amazon Prime – whether they’ll see unsuitable content, in terms of non-professional content, popping up on the various business models they use.”
However, “from the lower end of the spectrum, the less professional video producers, the feedback’s been good,” he says. Indeed, Broughton thinks AVD will see a boom in content from YouTube stars and other UGC ‘celebrities’: “it’s increasingly apparent that being present on multiple platforms rather than just one, such as YouTube, is really advantageous,” he says. “So not only would the same type of content be appearing on Amazon, I think it will be exactly the same content, the duplication of these people just moving to new platforms.”
This development could, however, pose a real problem for consumers, cautions Broughton. “With your latest series of whatever drama you’re currently interested in, you might end up with a hundred videos of dogs on skateboards.” This could lead to Amazon having to create “an additional layer of filtering just to make sure that those consumers who are looking for the most premium content are not inundated with this sort of user-generated stuff as well.”
On the whole, though, consumers will benefit because “they are getting a lot more choice here. It takes the Amazon video service from just a sort of SVOD streaming service to more of a video eco-system. They’ve already shown a commitment to getting on as many devices as possible – and this is an extension of that.”