Amazon IMDB unit is reportedly in development on a new ad-supported video on demand service (AVOD) that would provide catalog-level movies and TV shows for free to users of Amazon Fire TV devices, according to subscription site The Information.
Free Dive is one of the names being considered for the service. It would appear to be most similar to the Roku Channel, Roku’s thriving ad-supported programming outlet that now runs not only within the Roku ecosystem of OTT dongles, boxes and smart TVs, but also on the open internet.
Amazon is not confirming development of the platform. According to The Verge, around 48 million customers uses Fire TV dongles, boxes, cubes or enabled smart TVs. It’s unclear as to how many of those users also subscribe to the Amazon Prime SVOD platform, or how many of them use the Amazon Channels a la carte distribution scheme.
According to the Information report, Free Dive wouldn’t compete or displace the two aforementioned subscription platforms in any way, but merely offer Amazon a way to capitalize on the ad-supported VOD market Roku is clearly thriving in.
Roku has credited a recent spike in platform usage to the impact of the Roku Channel. Overall, the amount of time users spent watching TV on Roku increased by 57% year over year to 5.5 billion hours in the second quarter.
“I think the big takeaway for us is this is really the first year in which advertisers are proactively planning for OTT as part of their annual TV spending plan,” said Scott Rosenberg, general manager of platform business for Roku, speaking during the company’s Q2 conference call with investment analysts earlier this month. “Roku now uniquely delivers 10% of adult 18 to 34. So if you're planning against that critical demo, you’ve got to include OTT in your planning process.”
For its part, Amazon seems bullish on advertising revenue, even though it doesn’t currently have an AVOD service in the market.
“It’s now a multi-billion dollar business for us,” Amazon CFO Brian Olsavsky said during Amazon’s Q2 call. “We’re seeing strong adoption across a number of fronts—Amazon vendors, sellers, authors as well as third-party advertisers who want to reach Amazon customers.”
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