Add the direct-to-consumer subscription video market to the growing list of segments dominated by online retailer Amazon. More than half of all direct-to-consumer subscription video purchases are made through Amazon Prime Channels, with its dominance particularly pronounced with premium TV apps from HBO, Showtime and Starz, according to a study conducted by The Diffusion Group,
More than half of HBO direct-to-consumer subscribers used Amazon Prime Channels to purchase their service, according to TDG’s most recent research report The Future of Direct-to-Consumer Video Services - Analysis & Forecasts, 2018-2022. The rate is even higher for Showtime (72%) and Starz (70%), while only about 30% use the individual TV network's website or app.
"While Amazon Prime Video continues to receive the lion's share of attention from industry media, Amazon has quietly built a stronghold in the burgeoning direct-to-consumer market," TDG president Michael Greeson said in a statement. "Even with Apple's pending entry into this space, we expect this dominance to expand further in the next five years."
Apple is said to be readying a new feature in its TV app that will allow viewers to purchase subscriptions to networks and third party streaming video services directly rather than having to download individual apps from its App Store. The service, according to some in the industry, appears to be modeled after Amazon Prime Channels.
Greeson added that currently, Amazon gets a cut of direct-to-consumer sales and owns the customer relationship, while the content partners handle hosting, streaming and customer support. If Apple could wrangle similar deals, TDG predicts it will be successful given it does not require a $120 annual fee from customers just to access the service like Amazon does. TDG estimates that TV direct-to-consumer subscriptions will increase four-fold in the next five years.
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