Jeff Bezos’ Hollywood dreams aren’t just coming true they’re paying off.
Reuters has acquired Amazon financial information that for the first time provides insight into just how profitable and widely watched Amazon’s Prime Originals and streaming service are. Significantly, the documents shed light on the financial strategy of Prime Originals — specifically, how Amazon’s entertainment venture contributes to the growth of its Prime subscriber base, and overall subscription business profitability.
Amazon has never released statistics on its total Prime subscriber numbers. But according to the documents, Amazon Prime has a total U.S. audience of about 26 million viewers, which includes its originals as well as shows it licenses from other companies.
Prime Originals’ top television shows drove 5 million new Prime subscriptions by early 2017, according to the leaked documents. Reuters notes that using entertainment programming to draw customers to a Prime subscription is a key proponent of Amazon’s business strategy, a strategy that Jeff Bezos spoke to at a 2016 technology conference. Bezos said at the same conference that users who come to Prime through entertainment are more likely to convert to full-fledged subscriptions through free trials, renew subscriptions annually at higher rates, and even buy more products. So a Prime subscriber drawn in through Originals programming is a valuable one.
And Amazon knows it.
The documents show that Amazon calculates a direct return on investment for each show, based on what it costs to produce versus how many Prime subscriptions it drives. For example, The Man in the High Castle cost $72 million to produce and market, but drove 1.15 million new Prime subscribers. That comes out to a cost of $63 per new Prime subscriber — which is far less than the annual Prime fee of $99. Cha-ching!
The show Good Girls Revolt didn’t achieve similar success in converting viewers to subscribers. It cost $81 million to produce, but only drove 52,000 “first streams” (i.e. new viewers) on Amazon. That made its cost per new customer $1,560 — more than ten times the cost of a one year prime subscription.
Guess which show is still on the air.
(It’s ‘High Castle‘ — Good Girls Revolt was canceled after its first season despite a massive outcry from fans. Now, we know a bit more about why).
Reuters provides a handy graph to illustrate the direct comparison between a show’s overall cost, and its cost per new subscriber.
Critics have questioned Amazon’s programming decisions, saying at times that they were driven by sexism, at times that it was the experiment of a Hollywood outsider. But these financials show that there is indeed a method to Amazon’s madness.
However, is there a downside to evaluating shows based on the new viewers they bring in, as opposed to how well they’re satisfying existing customers? The documents don’t reveal whether this is part of the cancel vs. renew equation. But for loyal Amazon subscribers and viewers, it’s not a good look.
Whether you approve of Amazon’s apparent new viewer-to-subscriber business strategy, one thing’s for sure: Amazon’s entertainment venture is paying off, big time.
Everything coming to Amazon Prime Video in August 2019
“Summer may be coming to an end, but Prime Video is doing its best to keep the season of adventure going.
From gigantic journeys like Godzilla (2014) to smaller sagas like A Simple Favor, the streaming service is offering up a number of choice movies this August. Of course, they’re saving the most sought-after flicks for rent or purchase.
Throughout the month, Avengers: Endgame, The Souvenir, and Pokémon Detective Pikachu – two of which made our mid-year best of 2019 films list, and the third of which is freakin’ Pikachu in a hat – all become available through Prime Video. If you missed them in theaters or need to enjoy them just one more time, now’s your chance!”
The Walking Dead Movie Comic-Con Announcement
Check out the official The Walking Dead Movie Announcement starring Andrew Lincoln
Synopsis: Follows Rick Grimes from the departure of his final season in the TV series.
Starring: Pollyanna McIntosh, Andrew Lincoln Directed By: Greg Nicotero
US Release Date: 2020
More than 30m people have watched Netflix’s Murder Mystery; why?
The critics might have hated it, but this Jennifer Aniston and Adam Sandler-starring Agatha Christie pastiche broke the record for Netflix’s biggest opening weekend
Despite the critics (mostly) hating it, we now know that 30.9m Netflix account-holders watched Murder Mystery in its first three days of release. To put that in context: if two people watched the movie on each account, and you imagine them all paying the average $9 price of a cinema ticket, it would give the film an opening weekend of $556m, the third-largest ever. That is by no means a perfect formula, but nevertheless highlights a staggering performance for an Agatha Christie parody that stars Jennifer Aniston and Adam Sandler. How did that happen?