How Does Amazon Prime Video Makes Money? (Business Model + Examples)

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Netflix pioneered the streaming revolution worldwide, eliminating the need for traditional IPTV setups and bringing cinema directly to television sets. As technology advanced and became more accessible, a plethora of video-on-demand (VOD) services emerged over the past two decades, utilizing over-the-top (OTT) technology. Competitors like Amazon Prime, Disney, and Hulu gradually established their customer bases, posing significant competition to both Netflix and conventional IPTV distributors. We are VOD Solution provider & white label streaming solution

Among the early entrants into the streaming market, Amazon introduced two offerings—Prime Video and Prime Audio—as part of its Prime services initially designed to offer expedited deliveries at a reduced cost per package for subscribers. Both Prime Video and Prime Audio are included with the standard Amazon Prime subscription and are also available as standalone services, securing a prominent position in the expanding video-on-demand platform provider industry.

So, how does a streaming service such as Prime Video generate revenue? Before delving into this question, let’s examine some key statistics about Prime Video:

  • Global Prime Video subscribers number 117 million, projected to reach 180 million by 2026.
  • The United States alone boasts 53.3 million subscribers.
  • In 2020, Amazon allocated a hefty budget of $7 billion for original content.
  • Prime Video ranks as the second most compelling reason for Amazon Prime subscription.
  • Amazon secured rights to broadcast NFL games, including a special Black Friday game in 2023.

These figures underscore Amazon’s substantial investment in creating and acquiring content globally, with numerous countries producing original shows for Prime Video, drawing significant viewership. Prime Video generates revenue through a blend of advertising, subscriptions, and rental services, divided into two main segments.  We are VOD Solution provider & white label streaming solution

How Amazon Prime Video Operates

Similar to Netflix, Amazon Prime Video boasts a vast library of popular movies and shows, alongside other streaming services. Users can enjoy on-demand content via web browsers, mobile apps, or television streaming devices.  We are VOD Solution provider & white label streaming solution

Moreover, Prime Video produces its original TV shows and movies, catering to diverse audiences with offerings from channels like HBO and Starz. With over 24,000 movies and 2,100 shows available, subscribers can also rent or purchase additional content not included in their subscription package.

Furthermore, Prime Video Channels allow subscribers to add over 100 premium channels, enhancing the platform’s revenue streams.  We are VOD Solution provider & white label streaming solution

Monetization Model: How Prime Video Earns from Customers

Subscriber Video On Demand (SVOD) for Amazon Prime:

  1. Subscribers pay a fee for access to Prime Video, allowing streaming of a diverse range of TV shows, movies, and other content. Amazon also offers standalone Prime Video subscriptions for non-Prime members, with subscription prices varying by region.

Amazon Rental Service (PPV/TVOD):

  1. In addition to subscriptions, Prime Video generates revenue by selling or renting individual TV shows and movies to customers for a one-time fee, added to their Amazon account.

Ad-Based Video-On-Demand on Prime Video (AVOD):

  1. Prime Video incorporates ads into some programming and offers targeted advertising opportunities to companies aiming to reach specific audiences.

Business Model: Prime Video’s Content Plan

The content on Prime Video falls into three main categories:

Acquired Content Through Licensing Deals:

  1. Prime Video secures third-party content via licensing agreements with content owners or production studios, allowing legal streaming on its platform in exchange for a fee.

Content Created by Prime Studios:

  1. Amazon Original Series, produced by Amazon Studios, are exclusively available on Prime Video. These shows feature top talent and contribute to revenue through various monetization options.

Live Streaming of Events:

  1. Prime Video streams sports tournaments and events, acquiring exclusive broadcasting rights for various competitions globally, offering opportunities for revenue through advertising and one-time live streaming fees.  We are VOD Solution provider & white label streaming solution

Amazon Prime Video has adeptly deployed multiple revenue models, acquiring rights to iconic movies and shows while introducing region-specific content under its production banner. If you’re considering launching your own OTT streaming platform ptovider like Prime Video, Mogi offers a comprehensive solution with 24/7 technical support, digital rights management, video analytics, and versatile monetization models. 

Want to Build the Next Big OTT Platform? Book Your Free Demo Today! See how Mogi works through a 1-to-1 demo with our product experts.

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