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Amazon Expands OTT Channel Subscriptions to UK, Germany

The company’s latest move helps close the usage gap between it and rival Netflix

May 24, 2017 | Video

Approximately 18 months after offering Prime Video subscribers in the US the option to add individual TV channels to their service for additional monthly fees, Amazon has rolled out that option to users in the UK and Germany.

In the UK, Amazon Channels features 41 channels, including Eurosport Player, offering live and on-demand sports such as Grand Slam tennis, professional cycling and winter sports; ITV Hub+, an ad-free version the UK broadcaster’s catch-up service; and US-import documentary and reality TV channel Discovery.

Other options cater to more niche audiences, from anime fans to yoga practitioners, with prices ranging from $£1.49 to £7.99 ($2.01 to $10.78) per month.

It is the first time that some of these channels, including Discovery, have been made available outside of a cable or satellite TV bundle package.

Amazon Channels’ introductory lineup in Germany includes 26 options, including NBCUniversal International’s Syfy Horror and film studio MGM’s self-named greatest hits channel.

“For the first time, Prime members in the UK and Germany will be able to choose to watch premium TV channels without having to sign up to a bundle or a contract, giving them the freedom to pay for only what they want to watch,” said Alex Green, Amazon Channels’ managing director for Europe.

“From live sport to Bollywood, art house cinema to reality TV, and award-winning TV shows from popular channels like Discovery and ITV, Amazon Channels gives power back to customers to choose exactly what they want to watch,” he added.

UK Millennial vs. Total Internet Users Who Subscribe to Select Subscription Video-on-Demand Services, Sep 2016 (% of respondents in each group)

Amazon’s latest effort has the potential to help close the usage gap between it and rival Netflix in the UK, and to help keep that competitor at bay in Germany.

In the UK, Amazon trails both Netflix and premium sports network BT Sport in the fight for subscription video-on-demand (SVOD) users.

When Decipher polled UK internet users in September 2016 about their SVOD choices, 13% of total respondents and 19% of millennials were signed up to Prime Video—rates about half those of Netflix.

Conversely, as of November 2016, Prime Video was Germany’s second most used VOD service after YouTube, accessed by 23% of internet users in the previous 12 months, compared with 17% for Netflix, according to RBC Capital Markets. But Netflix has been gaining users faster—its usage rate grew more than 300% between December 2014 and last November, vs. Amazon’s 92% increase during the same period.

Video-on-Demand (VOD) Services Used by Internet Users in Germany to View Movies/TV Shows, Dec 2014-Nov 2016 (% of respondents)

As those rates show, there’s still much to play for when it comes to SVOD adoption in the UK and Germany. Only one-third of UK households were Amazon Prime subscribers as of March 2017, according to Cowen and Company estimates, and not all of those would have signed up for the service because of Prime Video specifically.

Estimates for Germany aren’t available, but it’s doubtful Amazon Prime’s household penetration is significantly higher.

Watching exclusive content not available elsewhere is one of the leading reasons that Prime Video subscribers in the UK signed up for the service, according to a December 2016 survey by GfK. While most of the channels on Amazon Channels are available by other means and therefore not exclusive per se, they are obscure enough to have been little known to many.

Having them accessible under one app in a highly visible marketplace via Amazon Channels could make them a draw for niche—but potentially sizable—additions in the aggregate to Prime Video’s audience.

—Cliff Annicelli

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