Analysis: Amazon Channels, which resells subscriptions to HBO, Showtime, and others, now accounts for 55% of à la carte direct-to-consumer video subscriptions
Amazon has quietly become a major player in the subscription video sales business: Amazon Channels, the company's platform … Tweets: @basche42 Tweets: Ben Basche / @basche42 : Amazon is new cable Netflix is new HBO http://twitter.com/...
Context & Ripple Effects
Amazon spent late 2015 laying the groundwork: reports of a plan to bundle other online subscriptions with Prime Instant Video were followed within weeks by the launch of Showtime and Starz as Prime add-ons, then by $15 HBO and $10 Cinemax subscriptions in 2016. The 55% figure is the payoff of that two-year build-out — the add-on shelf has become the default checkout for à la carte streaming.
The strategic tension was visible in advance: when Digiday examined Channels as a big OTT distributor, it found networks not worried about ceding power to Amazon. This analysis quantifies exactly how much power is being ceded — a majority of direct-to-consumer signups for premium networks now run through Amazon's storefront rather than the networks' own apps.
First-order effects
- HBO, Showtime and the other resold networks now acquire most of their à la carte subscribers through Amazon, which owns the billing relationship, the storefront placement, and a revenue cut on every signup.
- Amazon's leverage over each network grows with its share: at 55% of à la carte volume, individual partners have little practical alternative if they want access to Prime's subscriber base.
Second-order effects
- Networks' own direct-to-consumer apps are pushed into a secondary role as acquisition funnels, forcing them to compete on exclusive content and retention inside someone else's storefront — the dynamic Digiday found they had chosen not to fight.
- Other platforms with large installed bases face pressure to copy the add-on marketplace model, since Amazon has demonstrated that subscription resale can become a major business on top of an existing membership program.
Third-order effects
- If the pattern holds, streaming distribution re-concentrates around platform gatekeepers much like pay-TV's cable operators — the 'Amazon is new cable' framing in the coverage — with networks as content suppliers renting shelf space rather than owning customer relationships.
- The economics push toward a tiered industry structure: a few aggregators controlling discovery and billing, and content brands dependent on them for reach, echoing the bundle dynamics that streaming was originally built to escape.
The trend: Streaming is re-aggregating around platform-owned storefronts, with Amazon Channels showing that subscription resale — not standalone apps — is becoming the dominant path to à la carte viewers.