Executive Briefing

Comment on launch of Amazon Prime Video

By Marta Valsecchi, Operations Director at Osservatori Digital Innovation, and Andrea Lamperti, Head of the Internet Media Observatory

Comment on launch of Amazon Prime Video

The SVOD market (Subscription Video On Demand) in Italy is heightened by a new competitor -Amazon Prime Video – that will further contribute to pushing users towards this new way of enjoying video contents entirely independent from a TV programme schedule but very typical of the Internet. Due to the strength of the Amazon brand and of its marketing power, over the next months we expect to see a growth in the number of Italians who will test these services.

We are, however, talking about a limited percentage of the population, willing to pay for films, TV series and TV contents on demand: at international level it is estimated that approximately 5% of the population subscribes to such services, a percentage that will increase in the next 5 years but will remain below 10% (source: Statista). The variance of these numbers is significant from Country to Country: in the USA and North European Countries, in fact, over one fifth of the population has already adopted these services (source: Statista), showing a much stronger propensity than elsewhere to pay for premium contents. Within the paid video content market (pay tv, video download, streaming video), it is expected that the SVOD segment will show the highest growth rates over upcoming years.

According to data from our Internet Media Observatory, as of April 2016 in Italy there were 3.2 million users of this type of services (paid for or in the free trial period offered by many platforms).

 

Though constantly evolving, these services have limitations, particularly as regards catalogues: every company offers different contents, based on the purchased rights of films and TV series. To enjoy the full range of contents available on the market users would have to subscribe to multiple services. It therefore happens that users go from one platform to another to keep track of their favourite series. So it is on the contents that the most significant battles between market players are fought, to the point where they are all strongly focused on self-produced contents and on ensuring the most user attractive titles, without disregarding increasingly usable interfaces, content recommendation systems, and the possibility of enjoying contents from multiple devices to retain customers.
 

This market is also held back by the need for broadband internet connections but the road is already traced and the way to enjoying video contents in the future (free and paid) will be more and more a mix between linear (live/direct) enjoyment and users’ wish to create their own programme schedule.