Amazon Takes Aim at Youtube With New Video Platform

amazon video directBetween KDP, Createspace, Audible's ACX, the Amazon Appstore, and Comixology Submit, Amazon has at least five different ways for creators to monetize their content. And now they have unveiled a sixth.

Amazon launched a service on Tuesday that allows users to post videos and earn royalties from them, setting up the world's biggest online retailer to compete directly with Alphabet YouTube.

The service, called Amazon Video Direct, will make the uploaded videos available to rent or own, to view free with ads, or be packaged together and offered as an add-on subscription.

Amazon will pay content creators 50% of the revenue earned from rental receipts or sale of the videos, according to the company's license agreement. For ad-supported videos, the creators will get half of the net ad receipts.

Amazon's fast-growing Prime loyalty program already offers original TV programming and access to digital entertainment products such as Prime Music and Prime Video, as well as one-hour delivery of purchases, for an annual fee of $99.

YouTube offers a free, ad-supported service as well as a $10-per-month subscription option called YouTube Red. Amazon, though, has a long way to go to catch up with YouTube, the go-to venue for video on the internet since 2005.

"I don't see 50 million Prime users making a huge dent in the 2 billion YouTube user ecosystem," Wedbush Securities analyst Michael Pachter said in an email to Reuters.

Ivan Feinseth, at Tigress Financial Partners, said Amazon had the technological wherewithal and financial resources to be a contender in any business, but was similarly cautious. "I don't know if it's going to totally disrupt YouTube, or even some of the other services, but for those that are heavy Amazon users, it will have an appeal," he told Reuters.

Amazon's shares, already up about 57% in the past 12 months, rose 3.2% to an intraday record of $701.40.

Users of Amazon's service will be able to make their videos available in Uthe US, Germany, Austria, the United Kingdom. and Japan. The company has also signed up several partners for the service, including Conde Nast, the Guardian, Mashable and toymaker Mattel.

Amazon has been making a concentrated push into video. In a client note issued earlier on Tuesday, Bernstein analyst Carlos Kirjner estimated that the company will spend about $2.9 billion on video content for Amazon Prime this year.

Amazon recently launched a monthly subscription to its video program for $10.99 and plans to offer its video streaming service as a standalone service for a monthly fee of $8.99.

(Reporting by Narottam Medhora and Anya George Tharakan in Bengaluru; Editing by Ted Kerr)

10 Comments on Amazon Takes Aim at Youtube With New Video Platform

  1. Conpeting with youtube?
    Nah, that’s not the target.
    Amazon wants nothing to do with amateur phonecam videos or movie clips of dubious legality. Those will remain YouTube’s domain and they are welcome to it.
    (Proof: as I understand it, AVD videos must be closed-captioned.)

    Their target is similar to their KDP and ACX operations: serious Indie profesonals and small businesses.
    If you look at the subscription channels that have been popping up on FireTV you’ll see the real target.

    Here:
    http://www.aftvnews.com/tag/new-subscription/

    Much as with Kindle Unlimited, the value of participating in AVD for these vendors is not having to contend with the flood of free amateur content on youtube.

    This is Vimeo and to a lesser extent YouTube Red territory.

    Expect indie documentarians, cinematography students, kickstarter productions, and labors of love like Whedon’s MUCH ADO ABOUT NOTHING and DOCTOR HORRIBLE’S SING ALONG BLOG, Felicia Day’s THE GUILD, CAPER, etc. Stuff that had to rely on “free” to gain visibility and earn income from ads or other sources (DVD sales, merchandise, etc)

    The payout per minute model is straight out of Kindle Unlimited and Android Underground. Which means it is working for Amazon in those markets. When combined with ala carte sales and subscriptions, and Amazon’s already pretty decent exclusive content there should be enough eyeballs in the ecosystem to make it an attractive channel for small and midsized productions.

    They don’t want to be all things to all people but they do have a package that needs to be taken seriously.

    This is simply the obvious next step of their video efforts.
    The fun now is to wait and see if they drop the next shoe…
    (Live streaming nerwork TV ala Sling and Vue and the upcoming Hulu and DirecTV services.)

    • We must be watching different videos on Youtube.

      • It’s not what I watch: its what pops up in searches for trailers on google.
        Youtube is open to everything and they filter after the upload. Often way after. Try searching on google for “youtube movie” and watch the listings for full movies (only some removed) pop up. It’s not much better than ebooks on play.

        The Amazon Video Direct upload process is analogous to KDP in that to upload you have to enter personal and tax information. It is really a business tool, not a place for cellphone videos of cute cats.

      • I don’t watch phonecam videos or clips of dubious legality on YouTube either, but there are thousands of those type of videos on that site. Requiring CC on videos removes this such of “trash” from being added to the site.

  2. Submitted for your consideration:
    https://en.m.wikipedia.org/wiki/El_Mariachi

    In 1992, Robert Rodriguez wrote and directed the action thriller EL MARIACHI for US$7000. The movie was good enough to be picked up by Columbia pictures and ended up getting rave reviews and grossing $2M.

    Today it might cost him $10K to film but he could skip Columbia and theaters and take it straight to AVD and DVD via CreateSpace. (Note the parallel of the acronyms, btw. Sneaky suckers.)

    Also consider that the bulk of Babylon 5 SFX were created on now vintage PCs. Today, A few thousand bucks and the right talent can squeeze enough quality CGI for an animated short or enough SFX for a low budget movie in a few months. The problem until now, was how to make a business out of this capability. Or think of stopmotion animation artists. Motion comics. There’s a lot of ways to make video and tell stories.
    (Have you seen CAPER? They got very creative with their “SFX” technique which is worthy of emulation.)

    AVD is now one clear option for most of them.

    I expect computer graphic artists and cinematography students are cranking up their spreadsheets and drooling right now. Working actors, too. Not all will make money but out there there’s a few young Spielbergs and Rodriguezes who will make their names on AVD.

    New ballgame, I think.

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