Amazon Video announced this week it will be launching its Amazon Streaming Partners Programme (ASPP) in Europe.
According to Martin Scott, Principal Analyst at Analysys Mason, this platform business model allows video content owners to offer their own subscriptions through Amazon Video, instead of offering their own SVoD service.
"With the launch of the streaming partners programme, Amazon is now offering a content proposition that is much closer to that of traditional pay-TV providers, and at a lower price," says Martin Scott.
"Amazon is becoming a credible and more direct competitor to pay-TV, despite not competing with core live content."
This fits well with cord-cutting trends amongst Millennials: the UK regulator Ofcom’s annual Communications Market Report from 2015 identified that 50% of video consumption amongst consumers aged 16 to 24 was on-demand.
Analysys Mason anticipates that such viewing patterns will spread to the wider population over time. (See https://stakeholders.ofcom.org.uk for more information.)
However, not all hope is lost for traditional pay-TV providers. Amazon will still lack presence in the live sports market, which limits its ability to become many customers’ primary video service.
The partners programme has successfully brought on board over 30% of all SVoD services available in the USA to date – the potential for Amazon to partner with European SVoD providers is equally significant.
Analysys Mason has published a report about Amazon’s launch of the Amazon Streaming Partners Programme and Amazon Video Direct that assesses the impact of these launches on the pay-TV industry.
The report entitled ‘Amazon’s video strategy positions it to disrupt pay-TV in the future’ is available to view here https://www.analysysmason.com/Research/Content/Short-reports/Amazons-video-strategy-Jul2016-RDMV0-RDMB0/.
Martin Scott, who is also the report’s author says: “The flexibility and discounted pricing of Amazon Video’s partner networks will put increased price pressure on traditional pay TV.”
Figure: Amazon's video value chain [Source: Analysys Mason 2016]
View Analysys Mason's report:
Amazon’s video strategy positions it to disrupt pay-TV in the future