Why Amazon miniTV, when there is already Amazon Prime Video

Amazon first entered the OTT market with Amazon Prime Videos more than five years ago, but in recent months, the company has introduced a new OTT platform called Amazon Mini TV was launched in May 2021. It is a free, ad-supported video streaming service available within the Amazon shopping app. miniTV offers a selection of top quality content including originals, celebrity hosted reality shows, and daily short videos for no additional cost. miniTV is a free, ad-supported video streaming service available in India only. Whereas Amazon Prime Video was initially launched as Amazon Unbox in the United States on September 7, 2006. It was later rebranded as Amazon Instant Video on Demand in 2008, then as Amazon Instant Video in 2011. The service was eventually renamed Amazon Prime Video in 2015, aligning it with the Amazon Prime subscription service.

Mini TV has free content across 3 categories- Lifestyle (beauty, cooking), comedy, and web series. Amazon has partnered with various content creators (TVF, Filtercopy, etc.) for this service. Does this project simply intend to be a complementary service to Prime video or it has more strategic objectives than what’s represented?

How big is Amazon Prime?

In the United States, industry sources estimated a subscriber count of 167 million in 2023. In 2023, roughly 71 percent of all U.S. Amazon shoppers were Prime members, reflecting the service’s strong appeal to platform users

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Besides free deliveries and tailored deals, Prime users can also benefit from exclusive discounts over Amazon Prime Days, the annual shopping event generating increasing sales worldwide. In the United States, Amazon dominates the promising market of retail memberships, with other competitors generating only a fraction of Amazon’s revenue.

Amazon Prime Video Vs Amazon miniTV

Amazon’s miniTV & its strategic move

Increasing the number of ways that customers can interact with Amazon’s ecosystem: The foundation of Amazon’s business strategy is an ecosystem, and it has been repeatedly demonstrated that customers who have Prime memberships shop more than non-prime members. Compared to cable TV, 52% of daily video consumption in 2020 will occur online, according to research from Gartner. With Mini TV, Amazon hopes to increase its market share since it thinks that providing free content to users will encourage them to spend more time on the website and ultimately make Amazon their first choice when making purchases.

Encourage Amazon to expand its advertising business: Over the previous few years, Amazon’s advertising company has seen the most increase percentage in revenue across all categories. The company’s paid search, display, and video ad business mostly uses third-party sources, owned assets (like Twitch and IMDB), and its own platform. Amazon intended to use brand-sponsored video ads on Mini TV in order to monetise the platform. Amazon planned to use its Demand-side platform (DSP) to target customers more precisely.

Here are some key reasons for launching Amazon miniTV:

1. Ad-Supported Model: Unlike Amazon Prime Video, which operates on a subscription-based model, miniTV is an ad-supported free streaming service. This approach allows Amazon to attract a broader audience, including those who may not be willing or able to pay for a subscription.
2. Market Expansion: India has a diverse and vast market with varying consumption patterns. By offering a free service, Amazon can tap into a larger portion of the market, including those in smaller towns and cities who are more price-sensitive.
3. Content Diversification: miniTV provides a platform for more localized and diverse content, including short films, web series, and user-generated content. This helps Amazon cater to the varied tastes and preferences of Indian viewers.
4. Increased Engagement: By offering both free and premium content, Amazon can increase user engagement across its platforms. Viewers who start with miniTV might be enticed to subscribe to Amazon Prime for additional content and benefits.
5. Monetization Through Ads: miniTV allows Amazon to generate revenue through advertisements. This ad-supported model can be lucrative in a market like India, where digital ad spending is growing rapidly.
6. Brand Loyalty and Ecosystem: By providing multiple tiers of content consumption, Amazon strengthens its ecosystem. Users engaged with miniTV are more likely to explore other Amazon services and potentially convert to Prime membership for an ad-free experience and additional perks.

Overall, Amazon miniTV complements Amazon Prime Video by offering a free, ad-supported alternative that broadens Amazon’s reach and engagement in the Indian market.