Amazon is now planning to take on Google’s YouTube by allowing users to post videos to its website. Along with posting videos, users will also be able to make money from the videos in the form of advertising, royalties and other sources, says Bloomberg.
A tried and tested strategy
Amazon already offers video streaming to “tens of millions” of its Prime members as part of their shopping and free shipping subscriptions. Users already have the option to watch movies and television programs (including its own original productions) over the Internet, but the online retailer views videos as a way to get more users (mainly cord-cutters) and also retain existing ones.
This new product will give users one more option on what to watch without an upfront fee as those posting videos will earn money based on the how their video performs. Amazon says the new feature targets “professional video producers,” but the only eligibility criteria is that videos must be in high-definition and include closed-captioning for the hearing impaired.
Amazon’s new service offers several options to video producers to earn money. They can either sell or rent their programs or offer their videos in an advertising-supported format to all Amazon customers rather than just to Prime subscribers. One more option is to offer videos to Amazon Prime members and get paid based on how they perform, Bloomberg reports.
Amazon followed a similar strategy with e-books. To boost its stock of electronic books, the online retailer came up with Kindle Direct Publishing, which allowed authors to sidestep traditional publishers and post and sell their e-books directly to readers online.
YouTube too big for Amazon?
Amazon plans to give away about $1 million per month to the makers of the top 100 most popular programs viewed by Prime members, the report says. The company has already partnered with Samuel Goldwyn Films, Conde Nast Entertainment, Pro Guitar Lessons and HowStuffWorks. Videos from these producers are already available on Amazon Video. HowStuffWorks is a regular YouTuber with over 450,000 followers on the video site.
Nevertheless, it will be hard for the Seattle-based e-commerce giant to even challenge YouTube. The Google-owned product, which has over 1 billion viewers, earns billions of dollars a year in advertising revenue. Meanwhile, YouTube, which has created Internet sensations such as PewDiePie, is planning to come release its own subscription TV offering called Unplugged to diversify its revenue stream. This service could debut next year.
Along with videos, Amazon is also clashing with YouTube over video game streaming. The online retailer acquired Twitch, a live-streaming site, in 2014 for around $1 billion.
At 11:30 a.m. Eastern today, Amazon shares were up 2.44% at $696.14. Year to date, the stock is up by over 1%, while in the last year, it is up almost 61%.
