David Farnor | On 28, May 2018

When it comes to streaming, it’s no secret that Netflix is king, racing ahead of its competition thanks to a killer combination of global reach, appealing content and brand awareness. Amazon, by comparison, has struggled to establish itself as a major video player. With several Golden Globes under its belt, that’s more due to the strength of its brand in the retail sector, rather than its lack of impressive content.

2017 saw its investment in content start to pay off, with Amazon Prime Video enjoying the fastest growth of any subscription VOD service in the UK. Its number of subscribers jumped 41 per cent to reach a base of 4.3 million households, according to Barb’s data – ahead of NOW’s 40 per cent and Netflix’s 25 per cent growth. With Netflix boasting the biggest starting point, though, it still added the most subscribers last year, with 1.6 million more taking its total to 8.2 million households in Q4 2017.

Amazon, however, is not competing on a like-for-like basis. Its Prime Video service is usually bundled as part of an Amazon Prime membership, and used to up-sell customers to the next-day-delivery service – a model that hinders Prime Video’s growth, due to its cost and complexity, but also plays into Amazon’s strength: not as a streaming player, but as a shop. Indeed, Amazon Prime Video has recently rebranded its video offering to incorporate buying and renting titles into Prime Video, usually with a discount for Prime members; if you can’t get it as part of the subscription, Amazon’s reasoning goes, you can at least buy it cheaper here than somewhere else.

Its by focusing on its retail thinking that Amazon has come up with another cornerstone of its video presence: Amazon Channels. It’s been one year since the online giant launched the platform in the UK and Germany, offering Prime members in the UK the chance to add on individual subscriptions to their Amazon account – standalone streaming bundles without contracts from providers who are usually tied into Pay-TV, such as Eurosport.

“Since launching Prime Video Channels in the UK and Germany a year ago, we continue to build on the selection of live and on demand TV channels for Prime members with over 120 channels across Europe,” Alex Green, European MD of Channels and Sport at Amazon Prime Video, said in a statement last week, as they added a new channel from Starz – STARZPLAY – to the line-up.

In the UK, the idea carries less weight in than in the USA, where cord-cutting is increasingly the norm – a sign of the difference in the two TV landscapes, with British households served by free-to-air public service broadcasters (and Sky and NOW exclusively holding the rights to Showtime and HBO content, which are both on Amazon Channels in America). But Amazon Channels has quietly grown to become a dominant force Stateside, a sign of how valuable a weapon it has become in the VOD fight.

New stats from The Diffusion Group show that Amazon Channels accounts for 55 per cent of all a la carte video subscriptions, with over half (53 per cent) of HBO viewers who don’t have pay-TV using Amazon Channels as their provider. That’s even higher for Showtime, with 72 per cent of director-to-consumer subscribers using Amazon Channels, and 70 per cent of over-the-top STARZ subscribers.

The figures aren’t official, with Showtime telling Variety that the data is inaccurate, but without disclosing Amazon’s actual share. Nonetheless, Amazon’s successful strategy hasn’t gone unnoticed, with Apple looking to do the same thing with its own TV platform, offering apps such as HBO NOW on its platform.

When it comes to the race between Amazon and Netflix, the question, perhaps, is less who can grow faster, and more which one of them can sell the other.

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