Amazon exploring different ad strategies for Prime Video
Amazon is in the initial stages of potentially developing an ad-supported tier for Amazon Prime Video. In contrast to Amazon’s FAST option, Freevee, an AVOD option would allow advertisers to get in front of premium content. AVOD typically carries higher-than-average revenue per user, and many of the major streaming platforms feature an AVOD option, so it feels almost inevitable that Amazon will develop its own offering. There is also speculation that Amazon may be introducing the AVOD options for Max and Paramount+ through expanded Amazon Prime Video channel options. Prime Video is available as a perk of Amazon Prime ($139 annually or $14.99 a month) or as a standalone offering for $8.99 a month.
The Circana Take:
- Whether audiences are price-sensitive or ad-tolerant (or both), there is a sizable appetite for AVOD in the marketplace, and higher ARPU makes AVOD quite appealing for all parties.
- Developing another revenue center seems like a win but adding another viewing choice to a platform that already struggles with content discovery could create headwinds.
Verizon bundles Netflix with Paramount+ with Showtime on +play
In a move that is sure to pique the interest of industry insiders, Verizon recently announced a true bundle of competing SVOD services to its aggregation platform, +play. Netflix Premium (normally $19.99) will be bundled with Paramount+ with Showtime ($11.99) for $25.99 a month (saving about $6 a month). Since +play is merely an aggregation service, and offers no streaming content of its own, this new bundle is being offered on neutral ground.
The Circana Take:
- Will a modest cost savings on two bundled SVOD services be a sign of things to come, or will this promotion just be a flash in the pan?
Universal rakes in $1B from its COVID-era PVOD strategy
Universal’s COVID-era innovation to decrease the Pay-1 window (usually about 90 days) and release titles to “PVOD” (Premium Video on Demand, where consumers can rent or buy titles for $20-30) has been extremely successful. In under three years, the PVOD window has generated over $1 billion in revenue. And, more importantly, the PVOD window does not seem to have cannibalized box office or TVOD revenues.
The Circana Take:
- Release windows are tricky, and it took the COVID-related shutdowns for Hollywood to get creative.
- PVOD may have seemed risky at the outset, but Universal feels they have figured out the balance between availability and profit.