An interesting item from the The Information this week, which if true, could present an interesting trend change for how On Demand services seek to monetise their content. The news notes that Amazon intends to launch a free, ad-supported VOD service for its millions of Fire TV owners, as the retail juggernaut seeks to break further into the TV ad market.
There are approximately 48 million Fire TV owners worldwide, and the proposed service would offer them older content that is, for lack of a better term, gathering dust in the back of the library. To this end, Amazon can use the service to drive sales of their Fire TV hardware, with the packaged incentive of a host of free (ad supported) content ready and waiting for viewers when they buy.
The TV ad market is worth an estimated $70 billion, and while Amazon has experience in delivering ads on Twitch and the NFL games is makes available on Prime, this new service creates an entirely new opportunity for them to leverage their vast consumer data stores in order to deliver compelling targeted advertising. One would imagine that almost every product advertised will be purchasable through the retail storefront, enabling an almost frictionless ad-to-buy experience from within the UI, creating even more new monetisation pathways.
To our eyes, from a video perspective, what makes this interesting is how Amazon is tapping a different commerce model to create new opportunities of engagement with its existing customers. It is not believed that the service will compete with the Prime platform, but it will enable Amazon to further monetise content that might not be generating sufficient worth through Prime by using an AVOD model.
Of course, this method isn’t viable for any but the biggest service providers, given how tricky it can be to make AVOD pay well when you don’t have an extremely large and/or engaged audience. Nonetheless, it is an excellent example of how mixing and matching commerce models to suit both content and viewer can create exciting new revenue opportunities for a platform.Contact Airbeem