Amazon Said to Have Majority of Streaming Channels' Direct-to-Consumer Subs

Amazon has “quietly built a stronghold in the burgeoning direct-to-consumer market," said Michael Greeson, president, The Diffusion Group, in a Wednesday report saying Amazon Prime Channels account for more than half of all direct-to-consumer (DTC) subscriptions, including HBO, Showtime and Starz. More than half of HBO DTC subscribers used Amazon Prime Channels to buy their service, said TDG, and seven in 10 DTC Showtime or Starz subscribers went through Prime channels vs. three in 10 who used the networks’ website or app. Greeson cited reports that Apple plans to launch a new feature in its TV app that, instead of pushing interested viewers to buy and download apps from its App Store, will sell DTC apps directly to consumers, mimicking Amazon’s approach. Apple users would be able to subscribe to third-party streaming services within the TV app included on Apple TVs, iPhones and iPads, he said. In Amazon’s model, the company gets a slice of subscription revenue from DTC sales and owns the consumer relationship, while the broadcast partner shoulders the costs of hosting, streaming and customer support. “If Apple can repeat this formula,” Greeson said, “it could be successful,” as TV network DTC subscriptions are forecast to grow fourfold in the next five years. If Apple adopted a DTC model, it could have an advantage over Amazon Channels, which imposes a $119-a-year membership on Prime members before they can make a la carte purchases, he said. Apple didn't respond.