Amid all the conversation about what’s happening at Disney with its old-new CEO, and the continued bloodletting at Warner Bros. Discovery, and now AMC, it’s been easy to overlook other incumbents in the still-evolving video streaming business.
Perhaps nowhere is this more true than with Amazon, where, like its namesake river, vast currents appear to be shifting the many, many entertainment holdings of the online commerce and cloud giant. Little bits of flotsam pop up here and there to suggest big change beneath a seemingly placid surface, with potential implications for the entire industry.
First, it’s worth noting what’s already been a pretty impressive (and wildly expensive) 2022. In March, the company closed its $8.45 billion purchase of storied movie and TV studio MGM, at a multiple that raised eyebrows all over Hollywood. That brought into Amazon’s hands thousands of movies, tens of thousands of hours of TV, production teams, a premium cable network, and endless opportunities for remakes, reboots and sequels.
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In September, Amazon launched the most expensive series ever, The Rings of Power. It didn’t quite match the ratings of its obvious competition, HBO’s House of Dragons, but appears well situated for a long run.
A couple of weeks after the Lord of the Rings prequel debuted, Amazon kicked off its first self-produced season of Thursday Night Football ‘casts, for which it is paying the NFL $1 billion a year. Despite some really crummy matchups that tested a Hall of Fame broadcaster Al Michaels, the games are attracting promising ratings and subscriber signups.
And even with the eye-popping spending behind those 2022 projects, CEO Andy Jassy used last week’s New York Times Dealbook Summit to declare that Amazon’s entertainment venture is actually about more than just getting folks to buy things online.
“I do think over time we have opportunities to make our Prime Video business a standalone business with very attractive economics,” Jassy said. An Amazon Prime Video that actually can pay its own way must be scary for all the competitors financing their streaming transition from their declining broadcast and cable operations.
Jassy’s comments reminded everyone that Amazon has been shifting a lot, and is only getting bigger when it comes to entertainment. Among the changes in recent weeks:
At the Dealbook conference, Jassy articulated a future where Amazon makes plenty of its own content, but also becomes the fulcrum of distribution for lots of other services through its Channels program.
Jassy rightly suggested that, for all the flexibility and breadth of content and choice that the streaming has brought, many audiences miss one really good thing about cable TV: it was a one-stop shop for all your viewing interests.
“Customers would like to go to a place and find everything they want,” Jassy said. “They don’t want to go to five or six different places.”
His comments caught the attention of attendees at this week’s OTT.X strategy summit, where I moderated two panels of analysts. That consumer concern about having skip around is a real issue, they said. And for the niche channels that make up a significant part of OTT.X’s membership, having a place where customers can easily find and subscribe to their networks is invaluable.
But one need only look at Amazon’s history to understand there are risks if Amazon ultimately gains that kind of role for big parts of the industry.
One day, your company may see Amazon slash the rates it pays for your content, as has happened repeatedly with indie providers running their libraries on Amazon. And just maybe, as has happened with all kinds of manufacturers selling their goods on Amazon, it’s not hard to imagine one day your media company might wake up to find Amazon is making its own versions of the same thing, for a lot less.
Whatever plays out for Amazon over the next couple of years, I suspect Jassy is right about one thing: “I think this time, this next year or two in the economy, is going to test the resolve of a lot of companies.”
We know Amazon will still be there in 2024 and beyond. The question is who else will be around, and how will they reach the audiences they need to survive and thrive?
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