Amazon Video Direct Could Become Another Prime Mover

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Amazon on Tuesday announced the launch of Amazon Direct Video, a service that will let content creators not only reach tens of millions of potential viewers with self-generated video uploads, but also participate in revenue sharing.

Amazon will use the new service as an additional incentive to boost its Prime membership, which includes access to original content through its Netflix-like video streaming service, as well as free two-day shipping for online purchases and other perks.

Amazon Direct Video appears to be a direct shot at Google-owned YouTube, which has expanded its offerings to include music videos, original creative content and gaming-oriented material, along with the user-generated content for which it became famous.

"There are more options for distribution than ever before," said Jim Freeman, vice president of Amazon Video, "and with Amazon Video Direct, for the first time, there's a self service option for video providers to get their content into a premium streaming subscription service."

As part of the Tuesday launch, Amazon unveiled a revenue-sharing program called "AVD Stars." Amazon will pay video creators a bonus from its million-dollar-per-month fund, based on the Top 100 AVD titles listed in Prime Video. The first bonus distributions will be based on video streaming activity during the month of June.

The program's launch partners include a range of established and new content creators: Conde Nast Entertainment, Samuel Goldwyn Films, Mashable, Mattel, How Stuff Works and others.

Video providers will be able to make their content available in any of the countries where Amazon Video is offered: the U.S., UK, Germany, Austria and Japan.

Viewers can access the content on a number of different devices, including Fire TV and Fire tablets; connected televisions, laptops and game consoles; and iOS and Android tablets and mobile phones.

Video providers will be able to access performance metrics including projected revenue, number of minutes a given title is streamed, payment history, and number of subscribers. Creators will have the freedom and flexibility to make changes to their content based on these metrics.

"This is a natural extension for Amazon," said Kevin Krewell, principal analyst at Tirias Research.

"It already has the distribution platform for video, and has the user-generated content management from the Twitch gaming video service," he told the E-Commerce Times.

As the new entrant in the race, Amazon had to sweeten the pot a bit to attract content creators away from YouTube, Krewell added.

This is also a response to last year's launch of YouTube gaming, he added, considered a direct shot at Twitch, the gaming-oriented social media community that attracts more than 100 million unique monthly viewers.

"This new initiative is aimed at extending content aggregation beyond existing standalone [over-the-top] providers and bringing in content that we typically associate with YouTube," IDC Research Director Greg Ireland told the E-Commerce Times.

Amazon Video Direct's ability to compete will be limited -- at least, initially.

It "will be different from other competing services because, firstly, it doesn't have any track record for native content creators, such as the likes of Michelle Phan and Smosh, who have overwhelmingly built their personality-focused brands on YouTube," noted Tim Mulligan, senior analyst at Midea Research.

"Everything which Amazon does in the video space is geared towards customer acquisition into its retail ecosystem," he told the E-Commerce Times.

"Ultimately Amazon is all about selling content," Michael Jude, a research manager at Stratecast/Frost & Sullivan, told the E-Commerce Times.

The ultimate goal of Amazon Video Direct most likely is to lure more consumers into Prime membership.

David Jones is a freelance writer based in Essex County, New Jersey. He has written for Reuters, Bloomberg, Crain's New York Business and The New York Times.

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