Amazon’s approach to video ecommerce is giving them the edge in the streaming industry

When it comes to choosing between video streaming services, we’ve become accustomed to choosing between Netflix and Amazon Prime Video.

But while Netflix is currently far more popular, Amazon as a company does have a track record of disrupting—and often monopolising—every industry it enters. And that’s why so many analysts now expect that, in time, Amazon will surpass all the biggest names in streaming—Netflix included.

So how has adopting an eCommerce approach to its streaming service made Amazon so deadly?

Perks and price differences

eCommerce brands have always leveraged price reduction strategies while throwing in boatloads of perks to differentiate themselves. Amazon Video is conveniently tied into the Amazon Prime membership plan, meaning Prime members don’t just get access to Video, but also same-day grocery delivery, one- or two-day delivery for a ton of other items, two-day prescription delivery, and access to Amazon Music Prime.

You can of course access Video as a separate package for $8.99 a month, but few choose this option when they can access the expansive package deal of Prime for just an extra $4 a month. And considering that 76% of American households are already Prime members, it’s clear that this strategy is why Amazon is now as competitive as Netflix. By tying Video to Prime, Amazon has acquired a vast customer base who are less inclined to patronise the competition, even if they think the competition might have better content.

Acquisition vs original content

2018 marked the first time Netflix’s original content outpaced its acquired content, constituting 51% of its released titles. This was massively up from 25% just the previous year. Netflix’s content strategy involves increasing its annual expenditure on original content at a rate far higher than on its acquired content. But of course, creating a catalogue of original content takes a lot more time than simply acquiring content, so this strategy reduced the overall growth rate of Netflix’s content.

Most successful eCommerce entrepreneurs are those who sell what others make at an exceptionally high profit margin. Amazon’s eCommerce platform doesn’t just enable entrepreneurs to practice business in this way, but also operates according to the same principle itself, and extends it to its streaming service. After all, the more extensive your catalogue, the more customers you can retain, and the more profit you stand to make.

Like Netflix, Amazon has invested hugely in original content in the last five years—but unlike Netflix, Amazon isn’t slowing down on its acquisitions, either. In 2020 Amazon Video had three times more films on its platform than Netflix, demonstrating the payoff of Amazon’s $8.5m acquisition of MGM. This further positioned Amazon Video to outrace Netflix, and gave it exclusive access to some of Hollywood’s most celebrated and historic titles.

The power of reviews

A significant number of video streamers aren’t logging in to streaming services with their minds made up about what to watch. Most come to browse. But while both Netflix and Amazon Video enable subscribers to watch trailers or short previews of shows and films, only Video offers customer reviews. This is another advantage Amazon has over Netflix—because customer reviews are often far more frank and instructive, providing the kind of authentic guidance prospective viewers desire.

Customer reviews are a key attraction point because they’re perhaps the single most important factor on which eCommerce customers make decisions. These reviews necessitate that the business ensures consistently high-quality content. In typical eCommerce fashion, Amazon Video’s incorporation of in-app customer review capabilities enables viewers to make wiser decisions about which entertainment they spend their time and money on, thereby lessening the likelihood of disappointment and making sure viewers know what they’re getting into.

There could be any number of curveballs in this epic battle of the streamers, and no one can predict how this competition will play out over the coming years. Furthermore, who knows when the next challenger streamer will come along to ruffle some feathers? But while we don’t know which company will come out on top in the long run, one thing’s for sure: Amazon’s tried and tested eCommerce strategy is translating extremely well in the realm of streaming services, too.