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December 22, 2015 | Authored by: Vindicia Team

Amazon Prime to expand subscription services

The world of over-the-top video streaming grows more competitive by the minute. While Netflix still rules the roost in streaming video on demand, Amazon plans to expand its services in a potentially game-changing move.

Bloomberg recently reported that Prime Instant Video users will soon be able to add additional subscriptions to major movie and TV channels. Amazon will also sell its own packaged bundles. The strategy could make Amazon the go-to resource for SVOD, allowing users to quickly access other favorite channels in addition to the company's original content.

The Amazon strategy

As VentureBeat pointed out, it would be smart for Amazon to reach out to other broadcasters. While original programming remains a key selling point for OTT streaming video, it requires substantial financial resources to create. Amazon could offset these costs by acquiring external content at a lower cost.

"Consumers are cutting the cord to embrace online viewing."

Traditional television companies have been struggling with the rise of streaming video services. Many consumers have begun "cutting the cord" from cable to embrace a purely online viewing experience. As a result, these businesses are eager to maintain their relevance in a changing media environment. The answer could be partnering with a brand like Amazon. So far, the third-party services haven't been announced, but it's likely to be a few familiar names.

Bloomberg reported these partners will share some of their revenue with Amazon. The channels will have their own landing pages within Prime so they can maintain their branding as separate entities while still benefiting from being part of Amazon.

Battling subscription fatigue

Subscription businesses are booming, but after a certain point, it may be difficult to convince users to take on another recurring payment each month. Smart companies like Amazon could get around this problem through bundling. According to The Next Web, the growing number of subscriptions each household pays monthly can increase stress. On the other hand, customers will pay more when subscriptions come as a bundle rather than a smaller number of separate payments.

In this regard, Amazon is making a smart choice by offering an all-in-one, bundled service. If it makes the offerings enticing enough, the brand could draw business away from competitors Hulu and Netflix. The new service will be in direct competition with cable companies, except it will all be online.

In fact, according to Bloomberg, Netflix's move into their territory has caused Time Warner Inc., CBS Corp and NBC Universal to create similar streaming products to draw in the audiences that have abandoned traditional TV-viewing.

OTT video is an exciting market that is evolving quickly. To take advantage of this market you need to be creative and nimble to respond to industry changes. However, you also require a reliable subscription billing service to help you maintain the subscribers you already have. It's a pity to lose customers to involuntary churn when you are trying to grow a subscription business.

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Vindicia Team

Vindicia Team

We value our subject matter experts and the insights each of them brings to the table. We want to encourage more thought leaders to come together and share their industry knowledge through our blog. Think you have something interesting to contribute as a guest blogger? Contact us at info@vindicia.com