The Strategist

Amazon’s new video streaming service Freedive: Is it any different from others?

01/21/2019 - 11:32

IMDb website announced launch of its streaming service. TV shows, IMDb videos and Hollywood movies are now available to Freedive users from the United States.

The fastest growing segment of streaming content is video, accompanied by a certain number of advertisements (AVOD, advertising video on demand). The number of people who are increasingly refusing traditional TV services continues to increase both in the US and around the world.

The main goal of these users is to save on watching videos, so their demand for Netflix, Amazon Prime or Hulu subscriptions is rather limited.

Recently, Amazon launched its own free streaming service, IMDb Freedive. Its difference from traditional services is that it is monetized through advertising, not through a paid subscription.

Freedive is available online and through Amazon Fire TV devices. Soon, it will appear in the mobile version. In essence, Amazon uses free video streaming as an incentive for users to download the IMDb application, thus increasing its customer base.

Amazon's advertising business has been developing rapidly for a long time. The company's revenue from this industry more than doubled in the first three quarters of 2018.

Amazon mainly displays ads that pop up on search results pages and product listings. Nevertheless, some analysts began to wonder whether the paid-up content of the company would not harm the future by starting to hinder its further growth.

Amazon sells advertising on IMDb and works with media companies to show trailers for new releases. The company now broadcasts commercials during the Thursday Night Football show. It would seem that there are only 2 minutes of advertising time per hour, but about 120 advertising videos 30 second each are produced for the whole season.

Digital video advertising represents a huge opportunity for Amazon to skillfully use its market and its consumer data. Moreover, advertisers have increasingly begun to abandon traditional television advertising, preferring digital. Over the past year, this industry in the United States grew by 30%, while television advertising figures have hardly moved.

Most likely, Amazon will retain the ability to view Freedive content exclusively on its Fire TV platform. So the company will be able to maintain exclusivity of the service, while attracting a new growing audience. It may also be an incentive for some customers to buy Fire TV devices instead of competitors' devices, for example, Roku. As reported, already now the number of active Fire TV users reaches 30 million and exceeds the Roku indicator, equal to 27 million.