Amazon has never released numbers regarding its Prime Video service (a service that is included in its yearly Prime membership) until now. Amazon has shared some rather interesting numbers with Reuters, which include the fact that all content on Prime Video had an audience of around 26 million in 2017. Meanwhile its own original content had around 5 million people sign up for Prime by “early 2017”. What that means is that these original series brought in more Prime signups for the company, and that’s the whole reason why Amazon even does video.
Some of the internal documents that Reuters has seen from Amazon are pretty incredible. Like the graph below which shows the “cost per first stream”. This is a rather interesting formula that Amazon uses, but basically it’s the price it costs to hook a customer on Prime. So Amazon is effectively taking the cost for creating the show and marketing it, and divides it by the number of people who stream it first after purchasing Prime. As you can see in that graph, the first season of The Grand Tour was the best in this metric so far.
While Amazon’s Prime Video service is no real threat to Netflix right now, considering that 26 million figure is actually less than what Netflix did in the first quarter of 2017. But Amazon was looking to build credibility in Hollywood with its studios. Now it is looking to create shows that would appeal more to those that aren’t in the US. The reason for this is because Prime still has much more room to grow outside of the US. Meanwhile, in the US, mostly everyone has an Amazon Prime account, so there’s not a whole lot of room to grow. Amazon is continuing to broaden its lineup, to appeal to more users that don’t have Prime already. And apparently that job is falling in the hands of NBC Entertainment’s former president, Jennifer Salke. Amazon hired Salke in February to head up Amazon Studios. Amazon’s CEO, Jeff Bezos has also mentioned that he wants a drama that could rival “Game of Thrones” which is preparing for its final season.
Amazon is betting pretty big on video right now, as another way to bring more people into its Prime service. Which is a yearly service that costs $99 and brings in all sorts of perks – although the main one is free two-day shipping. The company is making all sorts of sequels, and spin-offs of already popular franchises, like the prequel to the Lord of the Rings series, that will be debuting later this year. Which is going to cost Amazon quite a bit of cash, which means it’s going to need to bring in a lot of new Prime subscribers to make that bet pay off.
