What’s Amazon’s Strategy for TV ?
Amazon recently launched a new Fire TV device capable of receiving free-to-air commercial TV channels. The Fire TV Recast is a device with digital tuners that can distribute live TV throughout the home, and record shows for later viewing on other Fire TV devices.
Much like a Slingbox, or the HD HomeRun tuners that can be used with Plex Media Server, it seems like a great product that provides consumers with more options on how they watch.
So why, with their streaming platform Prime Video, do Amazon want us to watch free-to-air content I wonder ?
I think it has a lot to do with controlling the advertising we see and monitoring closely what we choose to watch.
Advertising
Amazon is reportedly considering adding commercial skipping features to Fire TV Recast. This will no doubt help minimise the impact of brand campaigns that conflict with competing products currently being promoted on Amazon’s shopping sites.
And, even if ads aren’t skipped, because Amazon control the hardware, they will know which ads viewers are exposed to, simply by matching the channel selected and time of day against a dataset from Ebiquity/Nielsen. This data will be useful in pushing follow-up notifications via the Amazon Shopping app for the advertised brands, or to heat up demand from competitors with products on sale through Amazon.
Better Targeted Content
As well as the advertising opportunity, Amazon will be interested in knowing which shows are popular, and in which parts of the world. This will help them make the right show commissioning decisions for Prime TV and help them target out-of-home advertising for shows more effectively in different regions. It might even help them identify the next ’Top Gear’ to help quickly break into a foreign market.
In the UK, Amazon effectively poached the presenters of a top BBC show for “The Grand Tour” on Amazon Prime creating an enormous demand for the FireTV devices and Amazon Prime subscriptions needed to watch it. It was a content coup that firmly established Amazon as a major player in the UK streaming video market.
Amazon “Free Dive”
At the same time, Amazon are readying an ad-supported video service reportedly called ‘Free Dive’ available to FireTV device users with or without a Prime subscription.
Focusing on licensing older TV shows from major studios, ‘Free Dive’ will feature TV ad breaks during the shows in much the same way as linear broadcast TV — except this time Amazon will have intimate knowledge of who has seen which ad and when.
By being both the broadcaster and retailer, Amazon is positioned to steal advertisers and viewers away from traditional TV making revenue at every step of the consumer journey.
Just as they launch a device that strips out or skips the ads that support free-to-air commercial TV channels, Amazon is introducing un-skippable ads on a free-to-watch video service of their own.
Content and Conversion is the winning strategy
I strongly believe that a battle is now underway that threatens to kill free-to-air commercial TV as we know it. Amazon’s bold approach and proven ability to execute paints a dark picture not just for ad supported linear broadcast TV but for other similar services such as The Roku Channel too.
When Amazon are able to collect revenue not just from the advertising on their own free-to-watch video service but also profit from purchases made directly from it, there is a bigger pot of money for them to play with for the commissioning and production of shows. And with Amazon carefully collecting data to hone their content strategy for Free Dive and Prime Video, commercial broadcasters will struggle to compete.
Great content is what brings viewers to a platform, advertising is what makes it viable but enabling and profiting from consumers directly purchasing from the platform will be the deciding factor over who will win the war.
What about Google ?
It’s not just commercial TV broadcasters who should be worried. Google, who have yet to see major success with their Android TV platform will lose ground in terms of ad revenue too.
Google make a big noise about providing solutions to “Micro-Moments” — those times when we reach for a device to act on a desire to discover, learn about or buy something. They do this very well with information products like Google Search and Google Maps but not so well in terms of e-commerce focused products like Google Shopping. Google Shopping is too much of a protracted experience for the end user and there’s no hook up with TV Ads to help with this.
Amazon solve the product discovery problem much more effectively and, and as we’ve seen, will soon close the purchase loop by offering purchases directly from their own TV ads.
Amazon have taken the calculated approach of building and selling the TV receiver hardware consumers use to watch in order to achieve this goal. Google have the advantage of billions of Android devices already in consumers hands but still are unable to offer up purchase options at the time an ad is viewed on another screen.
Connected Ads
At Intrasonics, we’re working hard to offer advertisers, broadcasters and internet companies the chance to own the moment of engagement using sound to harness consumer interest when it matters most.
Amazon have led a strong first charge in the battle for TV advertising. If Google wish to prevent Amazon’s dominance and provide consumers with a shopping alternative, audio watermarking represents a great way to enter the fray.
In my previous article I pointed to how audio watermarking can reduce purchase friction and make broadcast TV ads more easily attributable to purchase decisions.
Connected Ads’ enable instant product discovery and impulse purchasing from advertising on both linear broadcast TV and streaming media.
The battle isn’t over yet. Perhaps now is the time for Google to start a charge of their own.
Intrasonics
Intrasonics, based in Cambridge UK, is a leading global provider of audio recognition technology.
Our audio watermarking and fingerprinting tech is widely used for audience research, synchronised apps and interactive toys.
We are market leaders in providing the tools (SDK, Software/Hardware Encoders) required for audio recognition and response triggers to help our customers monetise on the moment of engagement. Our technology has been fully protected by more than 20 patents in this area.
Further Reading
- https://medium.com/@stephenbeattie/can-audio-watermarked-connected-ads-reverse-the-drop-in-tv-ad-spend-and-help-save-commercial-tv-8df06fa3a94b
- http://www.slingbox.com/
- https://www.silicondust.com/
- https://www.plex.tv/en-gb/live-tv-dvr/
- https://www.amazon.com/Fire-TV-Recast-over-the-air-DVR-500GB-75-hours/dp/B01J6A6H74
- http://www.aftvnews.com/amazon-is-working-on-commercial-skipping-and-content-discovery-for-the-fire-tv-recast/
- https://www.theverge.com/2018/8/28/17793620/amazon-fire-tv-ad-supported-video-service-free-dive-prime-members-roku-channel
- https://www.thinkwithgoogle.com/marketing-resources/micro-moments/micro-moments-understand-new-consumer-behavior/
