Here at LRM, we give equal coverage to both the business and the creative sides of Hollywood, since they’re so intertwined. Money drives Hollywood, but these days the flow of money is getting harder to follow, as technology is taking the industry in different and unexpected directions. Streaming services, for example, are clearly changing the landscape, and the pace is only accelerating. We’ve talked a lot recently about Disney’s upcoming power play in this arena, but they’re far from the only mover or shaker.
Take Netflix, who over the last few years has grown to over 100 million subscribers (at roughly $10 per month, that’s a cool $12 billion in annual revenue). The Silicon Valley company is producing original series and movies at an unprecedented rate, partly to sustain their membership but also to fend off competition from direct competitors like Hulu. Somewhat under the radar, Seattle’s Amazon Video — part of the Amazon Prime suite of deals and services — has been coming on strong, and the numbers might surprise you.
According to Variety, Amazon Prime signed-up more than 4 million new subscribers during a one-week period prior to Christmas. As of September 2017, Amazon Prime had about 90 million subscribers — a 38% increase from the year before — all paying $99 per year. So, Amazon is clearly keeping pace with Netflix in terms of subscribers and revenue. Netflix is generating a lot more content than Amazon, but when you factor all of the games, music, and other stuff you can get with Prime, it tells a much different story.
What does this all mean? If you’re one of the six major Hollywood studios, the outlook is grim. Hollywood is navigating a minefield of dwindling audiences and escalating movie budgets; meanwhile, the streaming services spend next to nothing on marketing while growing their subscribers by double-digits each year. That’s not to suggest Hollywood is doomed, but it’s obvious where the trend is headed — and why all but Disney are viable targets for acquisition.
Amazon is working on a bunch of new initiatives, including online multiplayer games, drone deliveries, new media devices, and more. Their goal is to make Amazon Prime (and by extension Amazon Video) so completely indispensable to their subscribers — if it isn’t already — that they’ll look upon Netflix, Hulu, CBS All-Access, Disney, etc. as secondary content platforms. In other words, Amazon’s long-game is intended to marginalize both the Hollywood studios and the other streaming services…you could argue that they’ve already done so.
After all, are you more likely to quit Amazon Prime or Netflix? Or if you already subscribe to Amazon Prime and Netflix — as many folks do — is there room in your budget for HBO GO, Hulu, etc.? It’s looking more and more like an Amazon/Netflix media world in the future.
How many streaming services do you subscribe to each month? Let us know in the comments down below!
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