Apple Deal Is Just a Piece of Amazon’s Streaming Marketplace Strategy
Amazon’s streaming business, widely considered a loss leader for its online marketplace, is quickly turning into a marketplace of its own.
The e-commerce behemoth’s recent deal to offer Apple TV+ subscriptions through its Prime Video Channels platform is only the latest development in Amazon’s ongoing quest to become, as CEO Andy Jassy once described, “the center of the entertainment universe.”
Certainly, in drawing fellow tech giant Apple into its proverbial orbit, Amazon has inched closer to that goal, pulling further ahead of its competitors in the streaming aggregation space — even if only slightly.
While Netflix and Disney remain elusive — as does Peacock, whose parent Comcast has its own aggregation ambitions — Amazon now offers nearly every major U.S.-based SVOD through Prime Video Channels, besting its Big Tech rivals in that department. (Given Apple’s contentious history with Google, I’d be very surprised to see Apple TV+ aggregated through YouTube, though it’s clear that almost anything goes in the current streaming market.)
Amazon also boasts an advantage over Verizon — which boasts even more SVODs, including Disney’s portfolio and Netflix, on its +play aggregator — in its much larger user base. No matter how many SVODs Verizon offers, they will only be offered to its mobile and internet customers, a contingent likely dwarfed by Amazon’s Prime subscribers. (No official tally has ever been reported for the service, though Jassy said Prime Video had more than 200 million monthly viewers as of April 2024.)
Still, the addition of Apple TV+ to Prime Video Channels, while undoubtedly a win for Amazon, is hardly a paradigm shift for the streaming landscape. It would be surprising to see this strategy suddenly net Apple TV+ a massive influx of new subscribers or draw huge numbers of new users to Prime Video.
Indeed, according to data from analytics firm Antenna, Amazon actually lags behind Apple when it comes to aggregating subscriptions for the major SVODs. At the end of Q2 2024, per Antenna, 15% of such subscriptions in the U.S. (or around 36 million) were distributed through Apple platforms, versus 9% (about 22 million) through Prime Video channels.
Where Amazon does stand out, however, is the aggregation of niche SVODs, or what Antenna calls “specialty” services, such as British TV streamers BritBox and Acorn TV and anime service Crunchyroll.
Antenna data shows a whopping 58% of specialty SVOD subscriptions in the U.S. were purchased through Prime Video Channels as of Q2. Apple, the second most common distribution channel for these platforms, controlled just 11%.
This indicates Prime Video functions as an effective marketplace for niche streaming subscriptions, enticing consumers to sample services with which they might not otherwise engage.
It also underscores a fact further emphasized by the Apple TV+ deal: Aggregation, and the cuts of subscription revenues that come with it, are destined to become Amazon’s cash cow in the streaming business.
While no topline financial data on Prime Video has ever been disclosed, the SVOD is generally understood to be a loss leader that helps draw consumers into Amazon’s Prime subscription program. Even with advertising, Prime Video and its content are unlikely to net significant profits for Amazon for a long time — unless, of course, its revenues are supplemented by the reported 30%-50% of each subscription fee the tech giant reaps as a distribution partner.
It’s certainly a logical tack for the company to take if it’s set on remaining in the streaming business. After all, if there’s one thing Amazon is good at, it’s selling you things.
The e-commerce behemoth’s recent deal to offer Apple TV+ subscriptions through its Prime Video Channels platform is only the latest development in Amazon’s ongoing quest to become, as CEO Andy Jassy once described, “the center of the entertainment universe.”
Certainly, in drawing fellow tech giant Apple into its proverbial orbit, Amazon has inched closer to that goal, pulling further ahead of its competitors in the streaming aggregation space — even if only slightly.
While Netflix and Disney remain elusive — as does Peacock, whose parent Comcast has its own aggregation ambitions — Amazon now offers nearly every major U.S.-based SVOD through Prime Video Channels, besting its Big Tech rivals in that department. (Given Apple’s contentious history with Google, I’d be very surprised to see Apple TV+ aggregated through YouTube, though it’s clear that almost anything goes in the current streaming market.)
Amazon also boasts an advantage over Verizon — which boasts even more SVODs, including Disney’s portfolio and Netflix, on its +play aggregator — in its much larger user base. No matter how many SVODs Verizon offers, they will only be offered to its mobile and internet customers, a contingent likely dwarfed by Amazon’s Prime subscribers. (No official tally has ever been reported for the service, though Jassy said Prime Video had more than 200 million monthly viewers as of April 2024.)
Still, the addition of Apple TV+ to Prime Video Channels, while undoubtedly a win for Amazon, is hardly a paradigm shift for the streaming landscape. It would be surprising to see this strategy suddenly net Apple TV+ a massive influx of new subscribers or draw huge numbers of new users to Prime Video.
Indeed, according to data from analytics firm Antenna, Amazon actually lags behind Apple when it comes to aggregating subscriptions for the major SVODs. At the end of Q2 2024, per Antenna, 15% of such subscriptions in the U.S. (or around 36 million) were distributed through Apple platforms, versus 9% (about 22 million) through Prime Video channels.
Where Amazon does stand out, however, is the aggregation of niche SVODs, or what Antenna calls “specialty” services, such as British TV streamers BritBox and Acorn TV and anime service Crunchyroll.
Antenna data shows a whopping 58% of specialty SVOD subscriptions in the U.S. were purchased through Prime Video Channels as of Q2. Apple, the second most common distribution channel for these platforms, controlled just 11%.
This indicates Prime Video functions as an effective marketplace for niche streaming subscriptions, enticing consumers to sample services with which they might not otherwise engage.
It also underscores a fact further emphasized by the Apple TV+ deal: Aggregation, and the cuts of subscription revenues that come with it, are destined to become Amazon’s cash cow in the streaming business.
While no topline financial data on Prime Video has ever been disclosed, the SVOD is generally understood to be a loss leader that helps draw consumers into Amazon’s Prime subscription program. Even with advertising, Prime Video and its content are unlikely to net significant profits for Amazon for a long time — unless, of course, its revenues are supplemented by the reported 30%-50% of each subscription fee the tech giant reaps as a distribution partner.
It’s certainly a logical tack for the company to take if it’s set on remaining in the streaming business. After all, if there’s one thing Amazon is good at, it’s selling you things.