Bad News for Amazon Prime: People Are Only There for the Shipping
While Amazon Prime Video is the second most popular subscription video offering (after Netflix), people aren't signing on for the video. Data released today by the researchers at The Diffusion Group (TDG) show an overwhelming 79 percent of Amazon Prime subscribers cite free shipping as the top reason why they signed up. Only 11 percent say Prime Video was the key reason, followed by 4 percent who said Prime Music.
While getting an on-demand video library certainly "sweetened the deal" for many subscribers, TDG notes, the offering's central value is in shipping and retail. Amazon is actually losing money on its media offerings so it can bolster its retail business.
"The competitive threat that Amazon poses to the media industry is unique," says Michael Greeson, TDG's president and director of research. "Video, music, and gaming services are largely loss leaders to Amazon's cash-cow retail business. This strategy continues to enable the company to disrupt not only established media verticals but a widening array of other goods and services."
While Amazon originals like "The Man in the High Castle" and "The Marvelous Mrs. Maisel" aren't convincing many to sign up, Amazon is successfully up-marketing viewers once they're there: A May report from TDG showed that Amazon Prime Channels, the company's video service aggregator, has been highly successful. In fact, HBO gets 53 percent of its direct-to-consumer sales through Amazon Prime Channels.
The lowest-priced stick device for 4K video—as well as Dolby Vision and HDR-10+ support—the Fire TV Stick 4K lists for $49.99.
Look for Amazon Prime to see a lot of interest in free 30-day trials in December, as it offers Premier League streaming exclusively to members.
Owners will be able to control their cable boxes, sound bars, TVs, and more with Amazon's latest connected TV device. Prime members can get it for less if they hurry.
Over 70 percent of Showtime's online subscribers go through Amazon Prime Channels. Amazon has a hit, but Apple is close behind.