Amazon’s Prime Video Channels service will generate an estimated $1.7 billion in revenue in 2018, BMO Capital Markets predicts.
The tally represents more than a doubling of the $700 million BMO said that Channels wrought in 2017.
Factoring in a speculative 70% average cut Channels doles out to content partners including HBO, Showtime and CBS, just to name a few, total revenue of $1.7 billion translates to revenue of $500 million for Amazon … without producing a single show for the platform, or really doing much of anything in the way of marketing.
Related: Ad-Free CBS All Access Available Via Amazon Channels
By 2020, BMO predicts that Prime Video Channels will generate total revenue of $3.6 billion, keeping as much as $2.5 billion for itself.
"We believe [Channels] is a material driver of standalone OTT subscribers for many entertainment companies,” representing anywhere from 25%-45% of total OTT users depending on the channel,” BMO analysts Daniel Salmon and William Lowden wrote in the report." analysts Daniel Salmon and William Lowden wrote.
Amazon Prime Video Channels delivers 156 streaming video services in the U.S., handling billing and signup for its partners. The service is also available in the UK, German and Japan.
Channels is one component in a broad Amazon Prime Video offering, which also includes movie and TV show rentals and sales, as well as an SVOD services that offers popular original series including The Marvelous Mrs. Maisel.
Amazon doesn't break out the performance of its various video businesses in its earnings report, leaving analysts and press to come up with exercises in guess-timation.
Daniel Frankel is the managing editor of Next TV, an internet publishing vertical focused on the business of video streaming. A Los Angeles-based writer and editor who has covered the media and technology industries for more than two decades, Daniel has worked on staff for publications including E! Online, Electronic Media, Mediaweek, Variety, paidContent and GigaOm. You can start living a healthier life with greater wealth and prosperity by following Daniel on Twitter today!
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