Commentary
Amazon Remains Behind The Legacy TV Curtain
- by Wayne Friedman , Staff Writer, May 4, 2021
Amazon’s big numbers are all around us -- not just the $108.5 billion in revenue for one quarter, but the $6 billion-plus that comes from advertisingin that one three-month period.
Just to be clear, advertising is included in Amazon’s “Other” category. But analyst says virtually all of this comes from advertising -- around $6.4 billion, according to Bernstein Research.
Advertising is the perfect expansion of its powerful ecommerce business. There is, of course, crazy high-customer engagement with shoppers researching, reviewing and other interactions.
Amazon Prime 200 million members numbers are key to all this. And just to dangle something for TV business fanatics: We now know that 175 million of those members watch Prime Video.
How much time on Prime Video? Amazon didn’t say. What kind of shows? Nope, nothing? What specific audiences? Again, nothing.
Many talk up Netflix, Disney+ and the growing HBO Max. But Amazon Prime Video is a not-so-sleeping giant. Likewise, with all the talk around Roku, we can only assume that streaming video platform Amazon Fire TV -- also with around 50 million monthly active users -- has some decent underlying data, especially as it concerns healthy ad revenues.
if you are marketer looking long-term at premium streaming entertainment, you may already have decided how to get aboard the Amazon train -- without giving too much away to your competitors. (Or for that matter Amazon, when it comes to deal-making on its Fire TV platform.)
Advertising at Amazon rose fastest of all its business segments.
First-quarter 2021 had an amazing 81% share growth, compared to
first-quarter 2020. Pandemic disruptions? Nope,
It didn’t skip a beat. Second-quarter 2020 was up 50%; third-quarter 2020, was up 61%; and fourth quarter rose 71%.
A long-term picture shows Bernstein's estimates for fiscal year 2021, which are expected to see a 46% rise to $25.2 billion in advertising revenue and another 27% gain in 2022 to $32 billion.
Forget about the billions spent on TV and movie production for a moment for Amazon Prime Video. Think about how seemingly easy it is to grab “Thursday Night Football” in March -- and what that means for Amazon’s ad revenue take. It's an exclusive 10-year-deal, costing around $1 billion per year.
Lessons and history learned. Ask yourself where Netflix was a year ago in relation to any of the legacy media companies? What if Amazon is at that level right now — and going forward, it really decides to step on the gas?
If you think the premium streaming video world is crazy competitive and unpredictable now, I’m guessing this is only the start.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Wayne, the reason why Amazon didn't announce the number of hours per week---or month---that it's "Prime" subscribers watch its videos is because it's not a very impressive number. Also, much of that seemingly huge ad spend has little to do with the dollars coming from TV. I believe---and if anyone has the info please chime in---that a good deal of the "ad" money comes from companies selling product on Amazon--- many of whom are not national TV advertisers. So, until Amazon finds a way to convince its subs to spend a lot more time with its videos and can show TV advertisers that these viewers actually watch the commercials---and I mean watch----it's not going to pull many national TV ad dollars from TV.