Amazon’s New Online Video Platform Doesn't Need To Beat YouTube To Win
Amazon Video Direct lets creators get paid to upload videos. That doesn't mean the company is trying to be YouTube.
This week Amazon ratcheted up its attack on online video platforms,
going squarely, it seems, after YouTube and Vimeo, and to a lesser
extent Netflix and Facebook. Its new service,
Amazon Video Direct,
will let anyone upload video content to Amazon and its ad-free Prime
Video service, and take home a share of revenues from rentals, sales,
and streams.
Under the program, Amazon Video Direct, content creators will receive
either 55% of revenues from rentals or sales of videos, or $0.15 per
hour streamed, with a cap of $75,000 a year. There's also the
opportunity to sell videos as an add-on subscription to Prime Video
through the
Streaming Partners Program, or to have them stream to any Amazon customer with ads, in which case the creator gets a 55% share of ad revenues.
The swelling online video ad market and the growing number of online
viewers (who to an e-commerce company like Amazon are essentially
customers) are spurring everyone from social media giants like Facebook
to newer upstarts like
Vessel
to go after video creators and woo them with ever more advantageous
deals. The play also expands Amazon's dive into video content, which it
has been aggressively pursuing in recent years with original series like
Transparent,
Mozart in the Jungle, and an upcoming Woody Allen
series
Interestingly, Amazon's new proposition isn't that much more
financially appealing than YouTube's, but the fact that it is giving
creators a great deal of flexibility and empowerment to determine how
and where their stuff is streamed is a savvy move on Amazon's part.
YouTubers have long
complained
about the power that the Google-owned company wields over them, even as
it has made some of them very, very rich. Many have complained about
the 60-40 revenue split with AdSense, while
YouTube Red,
the company's $9.99 a month subscription service, incited grumbling
that YouTube was forcing some of its stars to go behind a paywall. So
even if Amazon isn't offering to print money for creators, selling AVD
as a
"self-service" platform is a way for it to amplify the message that it's putting creators first.
Built on the idea that more content will
drive more Prime subscriptions, and the idea that "if we can have
customers engage with our content, they will spend more time shopping.
Still, uploading videos to Amazon is
more cumbersome and time-intensive
than on other video sites: Uploaders must include their credit card and
social security number, and videos must be captioned (Amazon offers a
fee-based service that will build caption files for each video). And
videos don't appear immediately as they do on YouTube, Facebook, or
Vimeo: The company says it will take 3-5 days before your video appears
online.
But the process indicates the emphasis that Amazon is placing on
attracting professional and semi-pro video creators, the sort that draw
large fanbases and millions of views. It's also signed on companies like
Conde Nast and
The Guardian, who will upload their video content to the platform.
Amazon already spends an estimated $3 billion annually on its streaming video content, and according to
estimates by Piper Jaffray,
boasts between 57 million and 61 million Prime subscribers, compared
with Netflix's 75 million monthly subscribers. Meanwhile, eMarketer
estimates that digital video advertising will grow by 28.5% this year to
$9.84 billion, and
nearly $2 billion of that pie will go to YouTube, which boasts over 1 billion monthly users.
Of course, the ultimate beneficiary of AVD is Amazon itself, for
which AVD is—more than anything else—a marketing tool. "This a
continuing strategy of Amazon to utilize content to promote its
underlying business model and deepen engagement with customers, which
will ultimately lead to more and more sales," said Peter Csathy, CEO of
Manatt Digital Media.
In other words, he said, Amazon's is thinking, "If we can have
customers engage with our content, they will spend more time shopping."
The platform can also deepen Amazon's relationships with its sellers.
Small businesses, say, can create marketing videos or clips that tell
their story (or even just creative content) and then drive viewers back
to their retail page.
Will it work? Amazon's biggest challenge will be to direct eyeballs to its new video offerings. Are
Transparent
fans going to want to see user-generated clips made by video stars?
Amazon's credit-card-carrying users skew older than either YouTube or
Facebook. And Amazon lacks the sociability of those sites, where content
is constantly shared and liked by communities of friends and fans.
It's not likely Amazon is not going to run YouTube, which has a
decade of experience on its competitors, out of business. But if the
real end goal is to capture a few spare minutes of its customers'
attention, and encourage a new subscription to Amazon Prime or a retail
purchase, then it's on its way to winning.
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