AMAZON PRIME VIDEO and NETFLIX both now have over 200 Million subscribers. They are not equal.
Yesterday, Jeff Bezos announced in his final letter to shareholders that AMAZON PRIME now has over 200 Million subscribers worldwide (it’s his final letter as CEO - he’s moving up to the much more badass title of Executive Chairman by end of year).
That 200 Mil is an impressive 33% increase in the 15 months since Jan 2020. Although granted - having a service offering free home shipping during a pandemic is about as fortuitous as being a weed guy who still offers free home delivery during a pandemic. AMAZON of course bundles their streaming service AMAZON PRIME VIDEO (+’s are for Hollywood people) with the $13/month AMAZON PRIME membership that has the free shipping. Kinda like how PLAYBOY gave you articles to go with the nudity.
However what Jeff Bezos and AMAZON did not give us, is any indication as to how many of those 200 Million PRIME subscribers use that free PRIME VIDEO on a monthly basis. Or have ever used their PRIME VIDEO accounts. I mean even HBOMAX tells us how many people have it for free but still don’t actually use it.
AMAZON has also never indicated how many people pay for just PRIME VIDEO (which is avail for $9/month as a standalone service vs. paying the $13 for PRIME VIDEO with the free shipping). This would also be an important indicator of PRIME VIDEO’s overall draw as a streaming service offering… but no transparency here either.
FOLLOW THE $$
Granted yes, paid subscribers are what really matter in the end: if PRIME subscribers paying $13/month don’t use PRIME VIDEO - they’re still paying for it, just as cable TV customers pay as much as $10 a month for ESPN whether they know Aaron Rodgers plays football, or just think he’s Shailene Woodley’s fiancee who works for STATE FARM.
However this lack of subscriber engagement information certainly raises an eyebrow to put it mildly. Especially for a company that prides itself on putting the customer first, and likes to boast about its numbers as Bezos did in his shareholder letter. And - these vagaries about how many people actually use AMAZON PRIME VIDEO can have a serious material affect on it’s success amongst it’s streaming service peers, especially in competitive situations for new projects.
Take for an analogy: TheCW and ABC are in (roughly) the same number of US homes, but they have vastly different levels of engagement (i.e. ratings). So while selling your show to either network would give the show the same theoretical potential exposure, and give you a nice check either way, having a show on TheCW is an entirely different experience than having one at ABC… where more people will see it, and the potential for it to become a cultural phenomenon are far greater.
So if you were talent with a project in a competitive bidding situation between NETFLIX and AMAZON PRIME, would you rather go with the place that definitely has 200+ Million global subscribers and a proven track record of making hits of shows that don’t have 8 figure marketing budgets… (👋 “Queen’s Gambit”) or the place that has yet to launch a surprise hit show or movie that didn’t also have a sizable marketing budget and/or expensive pre-existing IP to go with it?
Subscriber numbers are one thing, but cultural relevancy and clout are another, especially in a business where that is the lifeblood. All due respect to the impressive PR campaign for it thus far, but you can’t help but wonder if a movie like “Sound of Metal” were on NETFLIX… what stratosphere it might be at in the culture right now.
Things can of course change as quickly as people started pretending they love all French TV shows during the pandemic. And AMAZON of course has the cash to just write you a check big enough to end any bidding war asap (see final note below). But, know that any headline or analysis putting NETFLIX and AMAZON PRIME VIDEO as being on the same footing now that both have ‘crossed’ the 200 Million subscriber mark… est au mieux une tromperie*.1
ALSO TO NOTE: AMAZON spent $11 Billion on Video & Music in 2020 (no breakdown on how much goes toward each - again about as helpful as the 200 Million PRIME subscriber number, as AMAZON MUSIC has royalty payments to labels at least somewhere in the Billions).
NETFLIX spent $11.5 Billion on video alone in 2020 (that’s actually down from over $13 Billion in 2019 due to covid production stoppages).
APPLE TV has still never released any subscriber, user engagement, or content spend numbers. While it certainly doesn’t have to, the “Ted Lasso” goodwill only goes so far in a town obsessed with popularity.
FINAL NOTE: While NETFLIX’s annual content spend is impressive…
AMAZON made over $21 Billion in Net Profit in 2020
APPLE made $28 Billion in Net Profit in just the last 3 months of 2020.
So…. the war chests are there if they really want to make this a production spend arms race, just as NETFLIX has done against traditional movie studios and networks over the past 6-8 years.
But while we know what streaming means to the future viability of companies like VIACOM, DISCOVERY, and DISNEY, the question still remains just what does the streaming service business mean to the frenemies from Seattle and the Bay Area, and do they really have the real drive to try and dominate Hollywood and at what cost.
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”is a deception at best”. Funny I always figured deception would sound a lot more like deception in French. Clearly I need to watch more French TV shows.