Amazon measures the success of content based on a cost of first stream metric. Analysis suggests that hitting targets for Amazon’s current sports deals is eminently achievable but competition with traditional broadcasters for more premium rights would require more bullish assumptions. It also throws up some interesting implications for the types of rights Amazon may look to acquire in the near future.
Cost per first stream is the cost of the content divided by the number of viewers who make the programme their first viewing choice after becoming a Prime subscriber. This is one metric among many that Amazon use to judge the success of a programme. It implies, not entirely surprisingly, that the success of a show is judged on its ability to sell more goods – Jeff Bezos: “When we win a Golden Globe, it helps us sell more shoes”.
This method is appropriate when the primary focus is driving new subscribers, especially those in different demographics, – i.e. the platform is in a relatively early stage of development. As the Amazon proposition develops we would expect their rights strategy to focus on content in-fill and building out the bundle to become, in the words of Jeff Bezos: “such a good value, you’d be irresponsible not to be a member”.
So far the analysis (originally conducted by Reuters) has focussed on Amazon’s Originals. We thought it would be interesting to test this metric on the sports rights Amazon has acquired and what it means for Amazon as a potential acquirer of further assets. Two key points immediately stand-out. First, the sums of money for major broadcast rights packages are significantly more than existing rights fees (sport and non-sport). Second, cost per first stream is a useful metric for evaluating ‘smaller’ rights; for ‘larger’ rights other metrics such as a lifetime value of a subscriber need to be considered to be able to justify expenditure.
Amazon measures the success of content based on a cost of first stream metric. Analysis suggests that hitting targets for Amazon’s current sports deals is eminently achievable but competition with traditional broadcasters for more premium rights would require more bullish assumptions. It also throws up some interesting implications for the types of rights Amazon may […]READ MORE
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