Interbrand Thinking

Hot Take: Amazon set to become the Premium in Freemium?

Insider view

Amazon has historically aimed at higher echelon content and programming, but their recent bolstering of the quietly acquired IMDb TV streaming service suggests they have plans to extend the audience as far as the spectrum can go.

Amazon spends an enormous amount of capital on their entertainment vertical, including $11 billion on Amazon Prime Video programming—a 41% increase from the year prior. Now Amazon has expanded into the increasingly popular free, ad-supported video on demand services. With over 108 million US viewers tuning in to watch ad-supported streaming in 2020, with expectations for that number to grow to 157 million by 2024, Amazon is cashing in on their discreet acquisition of IMDb TV back in 2019.

Whether it is the increase in content production, Amazon’s agreement with Universal Pictures to share certain streaming rights with the ad-supported video streaming service, or the roll out of an IMDb TV app on nearly all devices—including Amazon’s own smart TVs that it will release this fall—Amazon is hedging their bets on doubling down with the premium 18 to 49 demographic that predominantly makes up the audiences of ad-supported video on demand services.

Amazon’s approach stands in contrast to their strategy for Amazon Prime Video and their video game business, which spent hundreds of millions on two games that failed to launch. Nonetheless, it’s another reminder of Amazon’s agility and oscillating approach to market needs, suggesting that this may be their most lucrative approach to entertainment yet.

As the subscription streaming services category becomes increasingly crowded and more diluted, Amazon is forging its own path to ad-supported streaming dominance. And with IMDb TV set to be rebranded soon, presumably to sit within the Amazon masterbrand, all the pieces are set for Amazon to push ahead of competitors and become the premium within a freemium category.