Amazon just became a major player in the OTT video subscription business. Today they announced their Amazon Prime members can now access over 5,000 movie and TV titles on their Amazon Instant Video service, at no additional charge. With the move, Amazon takes on companies like Netflix and Hulu, both of which also offer subscription OTT video services.
“Millions of Amazon Prime members already enjoy the convenience of free Two-Day Shipping,” said Robbie Schwietzer, vice president of Amazon Prime. “Adding unlimited instant access to thousands of movies and TV shows at no additional cost is a great way to give members even more value for their $79 annual Amazon Prime membership.”
Amazon Prime members pay a $79 annual fee and in return get unlimited two-day shipping free. Amazon claims that “millions have been attracted” to its Prime membership program, which offers members free two-day shipping. Exact subscription numbers for Amazon Prime are a closely held secret.But by adding an OTT video component to the Amazon Prime fold, Amazon instantly becomes a major player in the burgeoning subscription OTT video business.
Amazon Prime members who want to take advantage of Amazon Instant Video will need a fast broadband connection– 3.5 Mb/s or higher– and any of nearly 200 models of compatible Internet-enabled TVs, Blu-ray players or set-top boxes. Content can also be streamed via Macs and PCs, according to the news release. Amazon is limiting the availability of content to Amazon Prime members, considering their existing OTT VOD service library, where titles can be individually rented or purchased, numbers around 90K titles. Amazon Prime members can access about 5,000 of those titles.
Two data points of note with this move. First, most marketing of Amazon Instant Video now features television viewing, rather than PC viewing. By doing this Amazon is helping push OTT into the mainstream by suggesting this service is a television experience, not a laptop one.
Second, Amazon is also testing bundling of OTT subscription VOD. By bundling the service with an existing customer base, Amazon Prime members in this case, they are bringing the tried and proven tactic of bundling to the OTT arena. Should it prove successful, we may see other attempts at this strategy. Examples could include, buy a connected TV from Samsung, get a year subscription to Amazon Instant Video (or maybe Netflix). It really broadens the possibilities and perhaps the reach of OTT video. Certainly too early to draw firm conclusions, but interesting to ponder.
