Amazon’s global push turns up heat on Netflix, content ecosystem

As famous ring announcer Michael Buffer would say, “Let’s get readdddy to rummmble!” The main event, Netflix vs. Amazon Prime Video, has gone global.

Amazon today said it customers worldwide could subscribe to a stand-alone Prime Video membership at an introductory price of $2.99 (or €2.99) per month for the first six months, far below the fee Netflix subscribers pay. In Belgium, Canada, France, India, Italy and Spain (where it operates the full Amazon Prime shipping program) Prime subscribers get the video service for free.

The etailer has been rumored to have planned some sort of global rollout for months, but the scope of this deployment is as stunning as was Netflix’s when it launched its “global Internet TV network” in January.

Prime Video will be available in more than 200 countries and territories – as it Netflix. Neither streamer opted to try and wedge their ways into the extremely difficult China market.
Amazon will offer subscribers a growing array of original content – a la Netflix – as well as Hollywood movies and TV shows. The service is available through the Amazon Prime Video app on Android and iOS phones and tablets, Fire Tablets, popular LG and Samsung Smart TVs or online at Amazon also is offering all titles for download to mobile devices for offline viewing, something Netflix just played catchup on earlier this month. Video will be available in English, with French, Italian, Portuguese and Spanish subtitled and dubbed versions also available.

What it mean for content producers?

Content owners, start your engines.

Amazon’s expansion is likely to set off a pricey competition for content, existing and original. At the very least, owners of titles Amazon already offers to U.S. subscribers – where it has a library of more than 18,000 films – are likely in for a payday… where rights are available.

There’s been little indication of just how big the content push will be across the world.

One thing is certain, an already-swamped content provider ecosystem will be pushed into über hyperdrive as the two behemoths pony up even more cash for content to feed their demanding audiences. And, as Netflix has discovered, it’s not enough to have Hollywood content, to be competitive you need local content. If it can be as internationally successful as Narcos, all the better. There’s little doubt Amazon will look to follow a similar path.

Of course, quality on all services may suffer, something some critics already are worried about, as the penchant for putting everything and anything online continues to grow.

But the public’s appetite seems to be insatiable, as evidenced by the increasing pace with which SVOD and ad-supported streamers are expanding their own content spend.

Other big tech players like Apple and Facebook also have been expected to jump into original content creation in the coming year.

Will HBO, Showtime and other broadcast networks go global, too?

HBO has taken a far more measured approach to its global expansion. It’s already got deals with a number of pay-TV operators around the world, as well as having over-the-top options HBO Go and HBO Now in multiple markets.

Last month, executives said they were measuring HBO’s performance in all of its markets and would be unlikely to undertake a pell-mell expansion to go head-to-head with Netflix.

But, now that Amazon also is available everywhere, that likely will change. In fact, Amazon’s rumored international push may have been among the reasons the pay-TV channel reportedly is considering cutting the strings with BAMTech, with which it powered its April 2015 launch after being unable to develop its own platform.

Will Showtime follow suit and go global? Probably, but it may take a little longer. Parent CBS potentially could take its CBS All Access platform overseas first.

How will Amazon’s expansion impact local and niche SVOD services?

Less than one might imagine. There remains a significant market for local content, something that no amount of spending by Amazon and Netflix can match. It’s an advantage that likely won’t be overcome.

Startups like iflix, which itself has global ambitions, isn’t really set up to compete with the Big Two (or even their distant cousin, Hulu) because those services are aiming to attract the top 10% to 15% of every market their in. As Netflix’s CEO Reed Hastings would say, the iPhone owners.

Iflix, Singtel’s Hooq, Media Prima’s Tonton and a bevy of other local and regional services instead will face off for a share of the 90% of local audiences that want more familiar programming delivered over the Internet, preferably on mobile devices.

Stay tuned.

Jim O’Neill is Editor of Videomind and Principal Analyst at Brightcove. You can follow him on Twitter @JimONeillMedia and on LinkedIn