business news in context, analysis with attitude

Barron’s has an interesting story about the competition between Amazon Prime Video and Netflix, each of which is spending hundreds of millions of dollars on original content in order to differentiate themselves.

Loop Capital, the story says, did a survey recently and discovered that Amazon Prime Video is of far less import to viewers and isn’t really a competitive threat to Netflix, which is seen as having an “unstoppable lead.”

What’s even more interesting is that it may not matter.

The survey suggests that Amazon’s video offerings are seen as a nice addition to Prime membership, but not a driving force when people decide to join up. Since six out of 10 US households are estimated to be Prime members, this means that it is part of a pervasive ecosystem - not the most important component, but a component nonetheless.

But … the survey also said that if Amazon is able to improve its content lineup, it could be a big deal.

“The opportunity for Amazon is to develop one or two ‘water cooler talk’ series that drive consumers to sign up for Amazon Prime in order to watch them—which will translate into additional product and service sales,” Loop’s analysts wrote.
KC's View:
Which is why Amazon spent $250 million to get the rights to turn “The Lord of the Rings” into a series, which may cost it as much as $1 billion to produce, if entertainment industry estimates are accurate.