Amazon Channels Driving OTT Video Subs as Apple Eyes Market Entry

Amazon Channels, the ecommerce behemoth’s platform selling Prime members access to third-party over-the-top video services, now accounts for 55% all SVOD purchases, according to new data from The Diffusion Group.

The firm found that Amazon Channels was responsible for 70% of a-la-carte sign-ups for Lionsgate-owned Starz and CBS-owned Showtime OTT, among others.

Amazon, which has more than 100 million Prime members globally, shrewdly gets a percentage of revenue subscriptions, including subscriber data, while third-party OTT services shoulder costs for hosting, streaming and customer support.

Media reports suggest about 18% of the U.S. population uses Amazon.

“While Prime Video continues to receive the lion’s share of attention from industry media, Amazon has quietly built a stronghold in the burgeoning direct-to-consumer video market,” Michael Greeson, president of TDG, said in a statement.

And Apple has taken note. The tech giant plans to incorporate a new feature in the app embedded in Apple TV, iPhone and iPad that would afford users access to third-party OTT video apps (with separate subscriptions).

TDG contends this could be a game changer since direct-to-consumer video platform subscriptions are projected to increase 400% over the next five years.

At the same time, only 8% of iTunes transactions involve renting or buying videos, according to Screen Media, with Apple TV generating about 15% market share in the streaming media device ecosystem.

“Apple would have a key advantage over Amazon Channels: it would not require a $120/year membership before [a consumer] can aggregate a-la-carte purchases through its TV app,” Greeson said.