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Did Amazon’s ad-splash cause ripples in the stream?

May has arrived, so it’s time to trace the impact Amazon’s introduction of ads to Prime Video has had on consumer metrics, and from what we can see… not a lot has changed.

Alexander Capon Senior Executive, Media Research 31 May 2024
May has arrived, so it’s time to trace the impact Amazon’s introduction of ads to Prime Video has had on consumer metrics, and from what we can see… not a lot has changed.

It feels a bit anticlimactic, but this does align with the trends we’ve seen in similar moves made by Netflix and Disney+, as outlined below. After a brief period of increasing Negative Buzz, levels tend to fall back to where they originally were, prior to the inclusion of ads.

Regarding Netflix, we saw a large spike in Negative Buzz as soon as new payment plans were enforced on legacy subscribers. Yet, this fell shortly after. It seems customers have short memories when it comes to streaming platforms – a unique advantage these brands have.

Streaming platforms often secure exclusive rights to series and films, and by doing so, they effectively create a captive audience. This “captivity” means that, when faced with the introduction of ads or price hikes, consumers may roll their eyes, but the desire to access exclusive content often outweighs this inconvenience, and often override the impulse to abandon ship.

Plus, it’s worth considering that in today’s fast-paced media landscape, consumer outrage is often ephemeral. Scandals and policy changes ignite quickly but are also swiftly overshadowed by the next news cycle. This relentless bombardment of information may contribute to a collective short-term memory effect, where yesterday’s grievances are forgotten amidst today’s headlines.

In such an environment, it may not be that customers are forgiving, but rather that they have limited bandwidth to maintain their indignation in the face of constant updates and distractions.

 

These unpopular changes do not seem to have had much impact on long-term Consideration of the brands either. Like Negative Buzz, Amazon registers a brief drop in Consideration, before returning to equilibrium after a couple of weeks. The same can be said of Netflix, for whom Consideration went up just before the introduction of new payment plans, so the drop seen at the beginning of Q2 only brought Consideration back down to the level it had been before the spike in March.

 

So, the question to ask is, what does this say about the streaming market? Netflix, Disney+, and Amazon Prime have thoroughly cemented themselves as the “Big Three” in this space – how can competitors hope to catch-up, if these brands appear impervious even after shooting themselves in the foot?

It could, perhaps, be a sign that the honeymoon period of streaming is coming to an end. As the landscape shifts from bold new frontier to our norm, anti-consumer market forces influencing all oligopolies will inevitably influence streaming too. Such moves from streaming giants feel akin to ‘shrinkflation’ – getting less but paying more, only via the medium of digital entertainment.

I mean, I haven’t cancelled my subscription either.

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