Here’s what Amazon wants to accomplish with its new Video Direct service
Two analysts weigh in on whether Amazon is moving against Google’s YouTube or reaching for something else.
Amazon is now making its video service more like its general marketplace.
On Tuesday, the e-commerce giant announced a new service, called Amazon Video Direct (AVD). While it allows any video creator to upload work and receive payment in several ways, it’s clearly directed at video professionals — which it describes as “creators and storytellers” — and not at your brother’s collection of adorable video clips of your new niece.
In other words, professional video makers can now choose to sell their works on Amazon without waiting to be selected by their programming staff, just as you might sell, say, your company’s line of candy through the Amazon marketplace.
The company noted that its launch partners include Conde Nast Entertainment, HowStuffWorks, Samuel Goldwyn Films, Mashable, Machinima and Pro Guitar Lessons.
The video maker will have several possible revenue-making options. Works uploaded to AVD can be included in Amazon’s Prime Video service, for instance, and thus made available to the tens of millions of $99/year members, with royalties paid for minutes streamed.
It can also be available to all Amazon customers, with revenue-sharing from ads, or it can be offered for rent or purchase.
The company is also announcing its AVD Stars program, which will split a monthly pot of a million dollars with video creators, based on engagement by the top 100 AVD titles in Prime.
Augmenting their high-cost library
Reportedly, Amazon will keep 45 percent of ad revenue from free showings and half of the revenue from subscriptions, rentals or purchases. Ad-free videos streamed through Prime will receive 15 cents per hour in the US and six cents elsewhere.
There are inevitable comparisons to Google’s YouTube, which is not only the king of user-generated video but is increasingly a source of professionally made content, including their paid subscription service without ads.
Ross Rubin, industry analyst at mobile analytics firm App Annie, pointed out that this new launch helps Amazon “augment the library they’ve been paying for,” which includes high-cost original content, as well as licensed movies and TV programs.
It also adds video content to Amazon’s growing list of devices, like the Fire tablet, which does not support the YouTube app.
But, while the creators for AVD need to be associated with a company when they sign up, the content does not necessarily have to be TV programs or movies.
For instance, Rubin noted, there are many celebrities and influencers who create video programming through marketing and production companies for audiences of followers that sometimes number in the millions. To date, they’ve been housed largely in YouTube, which has become what Rubin described as “the Internet’s default video repository.” Now, that could change.
“Self-assembling video playlists”
But Forrester Research Vice President James McQuivey told me “this isn’t about competing with YouTube.” Instead, he said, it’s about getting more audience attention, as cheaply as possible, with “a new kind of video experience.”
He noted that “the more minutes of video people watch, the more likely they are to engage Amazon’s other experiences — from its tablets to its Echo device, all of which leads to retail purchases.”
Spending “an additional billion dollars to create the content that will get more minutes of viewing just isn’t feasible right now,” he said, “so the company wants to tap into the digital content community to expand its video inventory.”
McQuivey predicts that this flood of new content “won’t matter much if Amazon doesn’t find a way to surface that content in a context-aware, predictive way.”
“The next move Amazon has to make,” he added, “will be to come up with personalized, self-assembling video playlists that are aware of what you want to watch and can position the right video in front of you when you are ready for it.”
“This will eventually be everybody’s model, YouTube’s included.”