Revealed: The viewing figures and data that drives Amazon Prime Video
Ivan Radford | On 18, Mar 2018
The online video industry is one of countless calculations and closely guarded secrets. While Netflix is known for keeping its cards to its chest, though, Amazon is just as discreet: the online giant doesn’t like to announce its number of Amazon Prime members, let alone break it down into how many viewers its individual Amazon Prime Video shows and films have. Now, though, new documents published by Reuters give us an inside look at the figures that power Prime Video.
While Netflix and Amazon are often pitted against each other, the comparison can be misleading: Amazon’s Prime Video platform chases the same customers, but in a very different way. For Amazon, Prime Video is part of the value added to an Amazon Prime membership, which costs £79 a year. That membership includes free next-day delivery in the UK, which encourages those who do sign up to use Amazon more for their day-to-day purchases. More viewers means more customers in their overall shop. Or, as CEO Jeff Bezos put it in 2016: “When we win a Golden Globe, it helps us sell more shoes. And it does that in a very direct way. Because if you look at Prime members, they buy more on Amazon than non-Prime members.”
It is no surprise, then, that while you can subscribe to Amazon Prime Video for £5.99 a month, with no contract, Amazon prefers to highlight its full Prime membership to new users, and many media publications follow their lead by mistakenly referring to Amazon Prime Video as simply “Amazon Prime”. Once signed up, those who both stream video and shop from Amazon are more likely to renew that annual subscription at the end of a year.
The result means that Amazon doesn’t have the same financial concerns as its competition. Netflix relies upon its shows to bring in more subscribers, thus boosting its monthly income, as well as retain existing users. Amazon, on the other hand, relies upon its shows to bring in more customers, so they can spend even more money on other things. The margins are looser and the revenue sources are more diverse, which means that Amazon can spend big when it needs to.
And that’s exactly what Amazon is now starting to do, as it moves into more mainstream, high-profile projects, following a period of awards-friendly smaller shows. The documents primarily cover that period from 2014 to 2017 (in the US, UK, Germany, Austria and Japan), and, as Amazon begins to cancel shows for the first time, they give us an idea of how its original series have grown Amazon’s body of subscribers.
According to Reuters’ analysts, Prime Video’s series account for as much as a quarter of total Prime membership sign-ups in those years. Amazon reportedly judges the impact of video upon Prime membership by looking at what customers first stream when they sign up. This “first stream” is then credited with enticing that person to start or renew a Prime subscription. Dividing each show by the number of first streams it generates gives Amazon an idea of how much it costs to acquire each Prime subscriber – the more popular the show, the less expensive the acquisition, and the more effective the content is.
The Man in the High Castle is one of Amazon’s most popular original series and cost $72 million to produce and market. In early 2017, it had 8 million US viewers, and generated 1.15 million first streams – leading to an acquisition cost of $63 per subscriber. Good Girls Revolt, on the other hand, was an equally well-received show that cost $81 million to produce, generating a lower volume of 52,000 first streams – leading to a much higher cost of around $1,500 per new customer. The Man in the High Castle is currently in production on its third season, while Good Girls Revolt was cancelled after its first.
Amazon’s highest profile series to date is The Grand Tour, its motoring series featuring the former Top Gear hosts of Jeremy Clarkson, Richard Hammond and James May. Building upon that international brand, it racked up 1.5 million first streams worldwide, generating new subscribers at a cost of just $49 per person in its first season.
Transparent, by comparison, has won multiple awards for Amazon and was one of Prime Video’s first breakout shows, but saw its number of viewers fall to 1.3 million for its third season, leaving it ranking outside of Amazon’s top 10 best-performing series, in terms of cost per first stream. Close behind The Grand Tour and The Man in the High Castle are Bosch, Hand of God and Goliath’s first seasons, which are all in Amazon’s top five, followed by Mozart in the Jungle Season 2, Bosch Season 2, The Man in the High Castle Season 2 and Sneaky Pete Season 1.
With Bosch and High Castle appearing twice each in the top 10, it is no surprise that Amazon is keen to focus on shows that have an in-built fanbase, which are potentially more likely to result in sign-ups. Indeed, both shows are also closely linked to Amazon’s primary retail area of books, able not only to encourage purchases by Prime Video viewers, but also recommend novels for them to purchase.
To compete with other streaming players, though, Amazon is having to invest more and more in its video arm – and the online giant is therefore looking to shift away from such programmes as Transparent, putting its previous pilot-heavy approach out to pasture, and look more to produce water-cooler hits along the lines of Game of Thrones. Last year, Amazon signed an extravagant deal for the rights to Lord of the Rings (another book-related franchise with a large existing audience), looking to make a new TV series based around Tolkien’s fantasy world. The rights cost $250 million alone, before production has even started to rack up expenses, and those could rise as high as $500 million for two seasons. That’s three times the amount paid for High Castle’s two seasons, which means the Lord of the Rings series would therefore need to generate three times more Prime members to be considered a worthwhile venture.
So how is Amazon’s strategy working out so far? Reuters’ analysts estimate that there are currently around 75 million Amazon Prime subscribers, with about half of all US households thought to have signed up – indeed, Amazon is now looking to grow its presence out of America, having recently launched Prime Video globally and also signed deals for an increasing number of foreign productions, from Germany and the UK to India. In the US alone, around 26 million Prime members were streaming TV or movies on Prime Video in early 2017 – much lower than the circa 55 million subscribers Netflix currently boasts in the US, part of its global membership of 117 million.
With some overlap between the streaming services highly likely, though, the question to ask isn’t how many subscribers Amazon Prime Video has, but where Netflix subscribers like to buy their shoes.