Speaking of corporate plots (ah, paranoia! how we love you!), here’s a commonsense look at the thinking behind Amazon.Com’s move into TV/video production.
by Timothy Stenovec
Netflix. Hulu Plus. And now, Amazon.
The world’s largest online retailer is joining its streaming video peers and betting millions of dollars on creating original content.
Beginning later this year, Amazon Prime members — customers who’ve paid $79 for a year of free two-day shipping on millions of items as well as digital access to Amazon’s library of movies, TV shows and ebooks — will be able to watch several new TV shows the company is producing.
But unlike Netflix and Hulu Plus, Amazon’s goal, analysts said, is beyond simply getting revenue from subscriptions. The retailer may well be using expensive original content to lure more people to its Prime membership service, so they’ll be more likely to purchase products like cameras, books and K-Cups.
“Content is king,” Brian Solis, principal analyst at Altimeter Group and the author of “What’s the Future of Business,” said in an email. “In an increasingly distributed consumption economy, Amazon is betting that content creates a bridge between Amazon, its products and services, and customers.”
According to a report from Morningstar, the investment research firm, Prime members shop more frequently than non-members, spend twice as much annually and tend to buy more expensive products.
Amazon won’t disclose how many people have coughed up for the annual Prime subscription. Morningstar puts that number at around 10 million. And Prime’s loyal membership is predicted to grow to 25 million by 2017.
“It’s pretty clear that there’s been an emphasis on adding Prime memberships over the last four years,” said R.J. Hottovy, the director of consumer cyclical and defensive research at Morningstar and the lead analyst on the report. He said Amazon’s foray into original content is “not only a way to keep the current Prime customers happy, but also drive a wider audience to the service.”
Entertainment as a way to gather a crowd in order to sell it something isn’t new. It’s been with us since the dawn of civilization. And as writers we’re always happy to see new markets opening up, especially markets that don’t seem to be run by the same Old Media gatekeepers. But, c’mon, Amazon, can’t you give us something better than the dreck you recently ordered? We’ll buy more. We promise.
(Our lawyers made us do it dept.: Um, we’re speaking for TVWriter™ here, not for our beloved visitors.)
Oh, wait, that could be a lie too…