The Pressure is on Amazon

Can Prime retain its streaming share - and become an ad impression machine?

• Hey there! I’m looking for sponsors for my podcast Next in Media - please get in touch if you’re interested mike@shieldsstrategic.com.

  ———————————————————————

The number I’m watching these days is roughly 3%.

That’s about where Amazon’s share of TV viewing has hovered over the past few years, according to Nielsen’s The Gauge.

It’s been a pretty consistent number, with some ups and downs probably due to seasonality and the NFL. It was 2.9% last January, 3.3% this past December, 2.8% in March - and most recently 3% in May.

Why do I care about this? Well, it’s been five months since Amazon lit up Prime with ads as the default consumer option. So far, everything seems - fine?

I’ve been wondering whether:

• We’d see Amazon’s share of viewing slip, since what was once an ad-free service that felt like a ‘free’ throw-in for people who mostly want free shipping suddenly became filled with ads. For instance, if you’re used to binging Netflix, it’s hard to downgrade to Netflix with Ads. Would the same feeling go for Prime?

• Or, is everyone just getting used to streaming with ads, that it would be no big deal?

So far, it’s tough to draw a conclusion (the beginning of the year was down compared to 2023, but May was solid). That’s why the rest of this year should prove telling.

Because Amazon is already shaking up the TV ad marketing by throwing so much potential inventory into the mix. The Wall Street Journal and The Information talked about how much this move is shaking up pricing and market dynamics.

Of course, for Amazon to have the predicted impact, it’s got to generate loads of ad avails. Which means people need to keep watching Prime.

The assumption seems to be that if Amazon’s 3% of TV viewing equates to X zillion hours of streaming - those zillion hours will stay the same, just with a few minutes of ad inventory worked in.

On The Town podcast, host Matthew Belloni cited a Moffett Nathanson report predicting that 50 billion net new ad impressions are set to hit the TV market.

Are we certain that is going to play out this way? Or is it possible that people will just opt to watch less Prime? Again, it’s too soon to tell.

But the pressure is clearly on Amazon to ensure that Prime remains watch worthy - or ideally must watch. Right now, as Bloomberg recently put it, there are only ad supported streamers that matter. For now, Amazon is in the mix.

While YouTube has always been primarily ad-supported, Netflix is trying to squeeze in an ad tier. Amazon simply flipped a switch on its entire base.

The early signs are that ad volume is trending upwards. Madison and Wall reported that "“9.8% of time is occurring viewing ads in streaming environments.  This is up significantly from a 7.7% share in May 2023, largely aided by the expansion of ad tiers from some streamers and the introduction of an ad tier from Amazon.”

In my experience at least, Amazon isn’t being shy about ratcheting up the ad load - as evidenced by the five ads I was forced to sit through prior to starting a movie the other night).

One thing to keep in mind here - that streaming is still growing overall, and the market remains fluid. Consider that since Jan 23 Gauge, YouTube’s share has jumped from 8.6% to 9.7%. Tubi has come out of nowhere to claim a decent share. But Amazon - well, it’s steady.

Which could be just fine.

It’s never been very easy to discern Amazon Prime’s programming strategy (I’m putting Thursday Night Football aside - as its really it’s own animal). They won some Emmy’s with prestige stuff like “Mozart in the Jungle” and “The Marvelous Ms. Maisel.” Bezos wanted his “Game of Thrones,” and came up with a “Lord of the Rings” show no one seems to care about. FreeVee - which was once Amazon’s free ad-supported alternative - hit it out of the park with “Jury Duty,” but now the FAST platform seems to have little reason to exist.

Amazon rarely cracks the top ten streaming charts - and there aren’t many “Baby Reindeers” on the service that pop into pop culture. Yes,“The Boys” seems to have a following, and the recent video-game-inspired “Fallout” has clearly entered the zeitgeist.

So maybe Prime’s sweet spot is sci-fi, comic/guy stuff.

The problem is, for media buyers, there isn’t a lot of information about who watches Prime or how big it is. In April Amazon announced that there are 200 million monthly Prime viewers. That number doesn’t say much on its own -presumably it’s global. If say half of that is in the US - that would actually seem to make that 3% share number rather paltry, no? Especially considering that the 3% share for Prime includes anything you watch on Prime - from renting a movie to watching an original.

Amazingly, even as we have half a dozen new metrics companies and TV currencies, no one seems to be able to tell me how many people watch Prime or who they are…I asked iSpot, VideoAmp and others - and didn’t get any clear answers

There’s no reason to believe there’s a problem here - but there is real pressure to keep that 3% up, and ultimately grow it if Amazon wants to become a major CTV ad player - especially since Amazon proper has become such an advertising juggernaut. It would be weirdly un Amazon to not play to win, or preferably dominate.

Prime’s numbers should climb the more that Amazon adds more like sports like The NBA. I’m actually surprised we haven’t seem Amazon roll out a slew of shows built around shopping.

Meanwhile, here’s what could be a total game changer: Amazon’s pricey upcoming competition show with the biggest star on YouTube (one of the biggest in the world) in Mr. Beast.

You have to hope that Amazon doesn’t get in the way (reports suggest Mr. Beast has full control) so that the show works. Then the key will be to make sure people can find it, and watch it regularly - without Beast’s subscriber base being served new episodes automatically, nor without YouTube’s algorithm.

If I’m Amazon, I’m also trying to figure out how to use the Beast show to get people to sample a lot more content, and come back more regularly. That starts with having a lot more for them to watch.

BTW, I’m a YouTuber

Please check out my ongoing series on the YouTube ad ecosystem in partnership with the folks at VuePlanner. We shot a ton of great interviews at Cannes - including chats with Joe Marchese, Janet Balis and Pfizer’s Wendy Aldrich, so lots more to come - but in the meantime, here’s the Next in Media YouTube channel. (call me Mr. Least -get it?)

You can even listen to the first three as a podcast this week!