Amazon isn’t a company that likes to run its mouth a whole lot. So it was news when Michael Paull, the company’s vp of digital video, had been scheduled for a keynote at last week’s NAB Show.
And then, what the session covered proved equally noteworthy. Instead of talking about Prime Video, which the company said earlier this month will soon be delivered as a stand-alone, separately priced app, he instead focused on the company’s Streaming Partners Program.
Unlike Netflix, whose strategy relies on scaling a single, stand-alone TV app, Amazon’s program can pose a legitimate threat to both traditional and skinny MVPD bundles with a cable-esque portfolio of multiple streaming SVOD apps. The program, which launched last December, has quickly become a viable option because of centralized payment and more frictionless user experience, he said. NBCUniversal’s Seeso comedy app and History Vault, from A+E Networks, just came aboard, joining apps from Showtime and Starz and bringing the tally to roughly 30 SVOD channels out of the 100 or so available in the U.S. market. “Dozens more” will be added in the coming months, he added.
“We think it can go mass market with consumers,” Paull said, adding that Amazon’s “unified, simple experience, leveraging our billing, customer service and hundreds of devices we are currently supporting” are key advantages. “We have a massive number of [customers], with their credit cards on file.” Moderator Will Richmond, founder of online video consultancy Broadband Directions, said, “We haven’t seen a third-party platform try to aggregate all of these [OTT] services or give choice to consumers so they can be aggregated under one umbrella.”
Another key advantage, Paull said, is that data mining enables more effective show promotion on the platform. A recent push for Starz’s Outlander yielded the network’s best day yet for new subscriber signups to its new app. Instead of blasting out promos for shows based on demographics, as MVPDs tend to do, Amazon’s targeted, algorithmic marketing strategy taps into its e-commerce expertise. “Since I have all this consumption data and I know how to use it, I can promote the right show to the right customer,” he said. “And it’s working.”
The Streaming Partners arm of the business is distinct from the Prime Video business, which continues to roll out a robust slate of original TV series and films. But the two are mutual beneficiaries. “The more programming that’s in our ecosystem, the more time people are going to spend there and the more likely they will be to be a Prime member,” Paull said.
Data on Amazon subscribers, churn rate or other key metrics that are shared by MVPDs on their quarterly earnings calls, was predictably scarce during the keynote session. But one area where numbers came into play was the market that Paull described as the “20-plus-million households that are not currently being served by pay-TV providers, 50% or 60% of which have broadband.” Research suggests that population will grow by 35%-40% by 2018, he added.
The fact that this population, along with current pay-TV subscribers, is a focus means larger networks such as Showtime or Starz see more upside than risk when balancing the opportunity with Amazon with the need to preserve their status within the traditional pay-TV ecosystem. “This feels very incremental to them,” Paull said.
Even so, the “unlimited capacity” on the Amazon platform to serve on-demand content could entice traditional programmers to create more brand-new SVOD services. Amid the overall content boom, which has curtailed the profit potential of all ad-supported TV, customers also expect a lot more. “The need to refresh content is much higher,” Paull said. “The bar for having great TV shows and movies is rising.”