Amazon is said to be building a free video streaming service that will run alongside Prime Video, its paid version. According to unconfirmed reports, the e-commerce giant is talking to movie studios and TV networks about the viability of such a service. The new service would be funded by ad revenue which would be shared with content creators. The content providers would own channels on the platform while Amazon would provide the infrastructure and gather analytics for advertisers.
The company’s Prime video is a video streaming service that is part of Prime membership. Prime members pay an annual fee of $99 or a monthly fee of $10.99. This gives them access to numerous benefits including a library of millions of songs, free two-day or one-day delivery, streaming video, unlimited photo storage, video games and many more. For $8.99 per month a user will have access to Prime Video.
A free video service that is supported with ad revenue would be a clever way for Amazon to engage new users and attract additional Prime memberships. The company has so far spent $4.5 billion this year alone on acquiring video content which is streamed without advertising. However, the company will be featuring commercials for live streams of upcoming NFL games this fall.
During a recent earnings call, Amazon’s CFO Brian Olsavsky indicated that the company will continue with its current strategy to boost spending allocations for video content in the year ahead.
Last month, the company said that it will move Amazon Studios into Culver Studios, in Culver City, California. Culver Studios was built by movie pioneer Thomas H. Ince. Amazing productions have been filmed at this location including “The Matrix,” “E.T.,” “Legally Blonde” and the original Batman series. Hollywood classics like “Citizen Kane” and “Gone With the Wind” were also shot in the renowned complex which will now be home to several teams working on technical, legal, creative, and marketing aspects. Amazon scooped Oscars for “The Salesman” and “Manchester by the Sea” becoming the first streaming studio to win an Academy Award. This places the studio in a league that has given the online retail giant great influence in Hollywood resulting in several Emmy awards.
On the other hand, big players such as Apple, Facebook and others are ramping up their expenditure on producing original content for their video streaming platforms.