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Does production contraction help Amazon original distribution?nScreenMedia

Amazon plans to expand original content distribution beyond Prime Video. But the service’s success could be the biggest barrier to licensing success.

Amazon will license Originals to cable TV, SVOD competitors

Amazon recently formed a new licensing division called Amazon MGM Studios Distribution, headed by Chris Ottinger. Mr. Ottinger ran MGM’s previous distribution team. He will be focused primarily on digital distribution, including premium VOD (PVOD), electronic sell-through (EST), and airlines. He is eyeing Amazon Originals to bolster his business:

“And looking at what we’re selling, could we be a better distributor if we had the Amazon catalog to bring through that pipeline? And the answer is certainly yes.”

He plans to focus on library titles that were popular but are now watched much less frequently by Prime Video viewers:

“This concept of warehousing product in these big vertical SVOD services, that’s definitely been a strategy for some folks. It’s not clear to me that it was ever a strategy at Amazon.”

Titles like “The Marvelous Mrs. Maisel,” “Goliath,” and “Bliss” will be added to the catalog of 4,000 films and 17,000 TV episodes from MGM.

TV services cutting back on production

It could be a good time to license originals. Streaming TV services are increasingly focused on profitability and growing revenue. Content creation is one of the highest costs any consumer-facing TV business faces, and many are cutting back on originals to reign in spending.

US scripted TV series orders by year 2019-2022Ampere Analysis says that in the last nine months of 2022, orders for US scripted TV series declined by 24% over the same period in 2021. The fourth quarter was particularly hard hit, with 108 TV scripted series orders versus 152 in Q4 2021 and 160 in Q4 2020. There has also been a pullback in orders for unscripted shows. Ampere claims WB Discovery cut orders by a third (or 172 series) between July 2022 and March 2023.

A lighter flow of new content into services could be a problem and is risky for them in two ways. Subscribers join a new service for the large content library and good original programming provided. Conversely, they leave when there isn’t enough content to keep them coming back. In other words, cutting back on originals can boost churn and cut new sign-ups.

Licensing quality originals from Amazon could help keep wavering subscribers committed to a service and help bring in new customers. However, there are risks that SVOD and cable TV providers might not be interested in the Amazon originals.

Is there a market for Amazon Originals?

why sub to a new SVOD serviceOne of the challenges in licensing originals like The Marvelous Mrs. Maisel to cable TV and other SVOD services in the US is the success of Prime. The company has almost 150 million Prime members in the US, all with free access to Prime Video. That means most people wanting to watch an Amazon original have had plenty of time to do so.

It is also unclear if the licensed shows will be removed from the Prime Video library. If they aren’t, that will diminish the value of the shows to licensors.

However, it could be that international markets – where Prime isn’t so broadly adopted – present a better opportunity for licensing the Originals. Mr. Ottiger thinks programs like Goliath could do well in foreign markets:

“Goliath launched in 2016. That’s a pretty long time ago now. But it’s Billy Bob Thornton. It’s a great drama. I think most of the international audience probably hasn’t seen it. Amazon wasn’t that broadly distributed at that point.”

Whether it is US or foreign markets that prove the best opportunity for licensing Prime Video Originals, the pullback in content spending and local factors like the US writers make now an excellent time to try the approach.


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