November 17, 2017

Amazon Prime's secret advertising plan to beat Netflix and Apple

13 November 2017, 07:58 | Casey Mitchell

So how do you compete with the biggest name in streaming and stand out in an increasingly crowded landscape?

Reports that Amazon is prepping an free, ad-supported service have been around nearly as long as Prime Video. Way back in 2014, the New York Post reported that Amazon was close to launching an ad-supported service the following year.

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Prime Video is part of the company's $99-a-year Prime membership, best known for free, two-day shipping.

According to AdAge, Amazon is now in talks with movie studios, media companies, and TV networks to plan content for a free video streaming service.

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While ad-supported streaming sounds an very bad lot like regular television watched on a website or app rather than via a cable box, Amazon is experimenting with different payment systems to woo potential advertisers. In return for that free viewing experience, Amazon would surround content with advertising to cover the costs of the service. Amazon would link payments for channels and programmes based on the number of hours people watch. Most people say they'd prefer to just pay more for streaming services than have to deal with advertisements. The company would have launched it as an ad-supported service instead. Welcome to 2017, where everyone wants everything to be free.

The eCommerce giant is hoping to delve into the back catalogues of TV and movie studios to bring in more children's programming, as well as lifestyle, travel, cooking, and other shows that would fit its platform. It sounds more like a way to woo people to sample Amazon than anything else.

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Amazon can often tout numbers suggesting that they have millions of subscribers to their video service, but these numbers are muddied by the fact that everyone who signs up for Amazon Prime (2-day delivery on nearly everything) comes with free access to the video catalog. Combine this with the ability to rent new releases for a few bucks and the various channels available through Amazon and you're looking at a strong service that offers a lot more variety than Netflix if you choose to take advantage of it.

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