Miranda Sings

Is Amazon’s new VOD really a YouTube competitor?

Digital experts weigh in on the e-commerce giant's recent bid to launch a free, ad-supported video platform, and what it means to competitors.
May 17, 2016

Amazon is proving itself to be something of a corporate chameleon.

Over the years, the company has successfully shifted its identity from e-commerce giant to full-fledged SVOD service, competing for global viewers with the likes of Netflix (and scooping up plenty of Emmy and Golden Globe awards through originals such as Transparent and Mozart in the Jungle along the way).

Now Amazon is again switching up the game. Last week, the company announced the launch of Amazon Video Direct (AVD), a free, ad-supported video platform that allows users to upload their own content.

If it sounds familiar, you’re not alone. Many were quick to see AVD as a direct competitor to Google-owned streaming platform YouTube.

But the comparison is not necessarily that simple.

True, Amazon’s new platform may be free and ad-supported, as is YouTube. But some digital experts say the similarities stop there.

Zefr co-CEO Richard Raddon, for example, believes AVD has more in common with self-declared “premium” services such as Vessel and Verizon’s go90, which acquire and license content for streaming.

Notably, Raddon points to Amazon’s submission process, which it outlines in its digital license agreement, as the dividing factor. The process means creators have to wait until Amazon has determined their submission is of the right caliber to stream on the service.

By leaving the final decision of what makes the cut up to Amazon staff, said Raddon, the company is more likely to attract “professional” creators.

“It’s likely to attract content uploaded from either traditional or digital media cos, or that sect of YouTube creators who make enough money off of YouTube to quit their jobs — the ones that boast fairly good production value,” he said.

That’s very different from YouTube, which Raddon describes as “the ‘every man’ platform.” While the platform might remove videos for copyright violations or inappropriate content, videos, on the whole, can be as low-quality as creators want (which is good news for all the owners of those cats riding Roombas out there).

“Indirectly, everyone is competitive. But when you read the fine print, it’s still very different. Amazon’s not trying to be a social network, and, ultimately, that’s what YouTube is. It allows everybody to publish, respond and comment,” he said.

Michael Gubbins, meanwhile, a digital media analyst with the U.K.-based consulting firm Sampomedia, said he wouldn’t be surprised if some creators ended up favoring Amazon over YouTube.

“There are, of course, hugely successful YouTubers commanding huge audiences and making serious money. But those big hitters remain a tiny minority and represent a fairly narrow genre of content. YouTube has perception issues with content creators, who may wish to explore the commercial potential of online video for narrative content,” said Gubbins in an email.

No details have been revealed on the revenue-sharing formula for AVD yet.

YouTube’s revenue share is a 55/45 split for the creator. While that’s enough provide a good financial boost to the PewDiePies and the Smoshs of the world, even the top-paid YouTubers make most of their money through branded deals and side projects, not ad revenue.

Another “perception problem” for YouTube identified by Gubbins is the platform’s association with piracy. While YouTube plays a big role in raising awareness for movie trailers and music videos on behalf of studios and producers, other users often (illegally) upload the same videos — thus taking the views (and revenue) out of the legitimate publishers’ pockets.

“The efforts to pull down illegally posted content are obvious but it is a constant battle and saps energy and resources in policing. If Amazon is able to establish its credentials as the clean service that works best for commercial content, it could carve out very valuable real estate.”

But overall, Gubbins said the best effect AVD will have is exactly what creators need: more space to develop scripts and ideas.

“The TV schedules and cinema programs are overcrowded. YouTube may be seen by up-and-coming content creators as a byword for amateurism. Amazon may have a big role in that area,” he said.

Raddon added that there’s potential for Amazon’s main SVOD competitors, Hulu and Netflix, to also “court those creators who are making serious money off of YouTube” by offering options for more short-form originals from creators.

Netflix has already commissioned an original series by Colleen Ballinger (pictured), the comedian behind the tone-deaf character Miranda Sings (the series, Haters Back Off, is a more long-form expansion of Miranda’s exploits).

However, Raddon said that all the major SVODs are currently going in different directions — with Netflix focused on its originals, Amazon focused on acquiring the most content and Hulu seemingly positioning itself as a competitor to traditional television. If anything, he said, the new platform could be another way for Amazon to differentiate itself from the other SVODs.

But Amazon still stands a good shot at success, he said, not just because it has the technical chops to create a clean interface, but also because of its distribution prowess. Although Amazon keeps its subscriber metrics notoriously close to its chest, the platform reportedly boasts tens of millions of users in the U.S. alone.

“More and more people engage with Amazon Video because they’re already Prime members. (Amazon) already has an online relationship with a huge customer base. All you have to do is message to (customers) saying, ‘Hey, download this app and you can watch this video for free.'”

And even the most famous creators — like PewDiePie — probably aren’t as devoted to YouTube as a single distribution channel as fans may think.

“When creators get such a large audience and if they’re offered a good enough deal, it doesn’t make a difference what platform they’re on. They’ll create content everywhere,” said Raddon.

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