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October 3, 2014
Explaining Amazon’s U-Turn on its Content Distribution Strategy
Posted by KMontgomery

Explaining Amazon’s U-Turn on its Content Distribution Strategy

Netflix cultivated the idea of binge-viewing and now Amazon are following suit. Why the change of heart?

Last week Amazon Prime Instant Video (APIV) made all 10 episodes of its new dark comedy Transparent, available to stream immediately and on demand. No great shock there, right? Except that it seemed to signal a departure from the way the company had previously said it would release content. Only 11 months ago Roy Price, VP Amazon Studiosheld the view that:

[Binge-viewing] makes it hard to talk about a show with your friends because you never know how many episodes they’ve watched – and that’s part of the fun of a TV show. On the latter point, at first it was a hunch but then we confirmed it by looking at social conversation on Twitter and Facebook: shows that are binge-released tend to have unusually rapid, sometimes precipitous declines in public conversation.

Back then it seemed as if generating discussions around television was at the forefront of Amazon’s distribution strategy. By extension, Netflix was made out to be depriving its customers of the shared television experience that only comes with periodic episode releases.

Last week however, Price appeared to have done a U-turn:

[TV] should start when you start. You should be the boss … not the schedule.

That’s quite a change in opinion. We’ve jotted down some thoughts on why Amazon may have altered its stance on mass delivery of original programming, how binge-viewing is on the rise and how service providers can cope with the increased demands on their service when releasing highly-anticipated TV series in one go.

#1. Customers Love to Binge Watch…and the Numbers Prove it

One of the main factors that may have prompted Amazon to mass-release its original content is the rise in popularity of binge-watching; the term has become so ubiquitous that it was short-listed for ‘Word of the Year’ by Oxford Dictionary in 2013.

Defined as watching between two-six episodes of the same TV show in one sitting, binge-watching has been made popular by Netflix and its slate of original content including Orange is the New Black and House of Cards. Indeed, almost 670,000 U.S subscribers were found to have watched the entire 13-episode second season of HoC two days after its release, four times as many who did the same for season one.

For Amazon it’s getting harder to maintain the idea that customers should watch shows at the same pace as one another to prevent spoilers. A recent study by Harris Poll (on behalf of Netflix) found that 76% of Americans say spoilers are now a fact of life, and 94% claim that hearing a spoiler won’t dissuade them from watching a show. Sure, people want to have conversations about their favourite characters or discuss what really happened to Tony Soprano in that scene, but spoilers are now seen more as teasers of what’s to come. 13% of the Americans surveyed reported that a spoiler actually increases their interest in the show.

That’s not all; 94% of people questioned by Piksel in 2013 claimed to indulge in some form of binge-watching regularly and only 13% of that number preferred the live viewing experience. The same study found that a staggering 64% of people prefer episodes to be released all in one go and only 13% want weekly instalments.

For viewers, the fabled watercooler moment seems to be less important than being able to watch a show at their own pace – an attitude that Amazon will have found difficult to ignore. You could say that based on these statistics, and others like them, the e-commerce company had no choice but to follow the lead set by Netflix.

#2. ‘A Golden Age of Television’

It’s also important to consider the type of content that is now being created and binge-released.  In an evangelistic speech during the Guardian Edinburgh Television Festival last year, Kevin Spacey talked about the long-game philosophy behind House of Cards:

We wanted to start to tell a story that was going to take a long time to tell. We were creating a sophisticated multi-layer story with complex characters who would reveal themselves over time, and relationships that would need space to play out.

And that’s the crux; the shows that suit binge-viewing are character driven, drawn out narratives that viewers can immerse themselves in. Netflix seems to be satisfying this desire: it secured 31 Emmy nominations and took home 7 awards in 2014. Considering that two years ago the streaming service didn’t even attend the event, that’s pretty good going.

Grant McCracken, a cultural anthropologist who has worked with Netflix on a variety of studies, believes that users crave long narratives in their television viewing:

TV viewers are no longer zoning out as a way to forget about their day; they are tuning in, on their own schedule, to a different world.  Getting immersed in multiple episodes or even multiple seasons of a show over a few weeks is a new kind of escapism that is especially welcomed today.

Netflix and now Amazon are producing long, long-form content and this will, we think, become common practice for VOD services who venture into producing their own programming. For on-demand operators it’s less to do with getting great ratings than it is securing and retaining subscribers.

#3. Supplier Solutions

So let’s say you’ve produced / commissioned / bought an original piece of content and you just know in your gut that it’s going to be a hit. How do you prepare your service for the extra spike in traffic that you’ll get when the show goes live on-demand?

We posed this question to Jim Tanner, Chief Architect at Clearleap, who told us that,

My best piece of advice on how to plan your content strategy to absorb surge viewing is to take your wildest guess of volume and then triple it. You’ll probably be in the neighbourhood then.

Load testing is one of the best ways to prepare for these surges in content viewing. In order to consistently provide a high-quality, reliable experience, providers should go beyond traditional load testing and test for peaks that are significantly higher than a typical subscriber peak.

You should build in bandwidth and streaming considerations to your load testing as well. It’s best to build from the bottom up, doing capacity planning around data centers and working closely with any CDN partners to avoid bottlenecks.

Albert Lai, CTO of Media at Brightcove, thinks it’s about “scalability, reliability and performance” and, for you techies out there, suggests an authoritative plan of action:

a. Use a content delivery network (CDN) to scale delivery globally – and consider multiple CDNs if needed to optimise performance in specific geographic regions

b. Expect that users will have performance variance from their network — throughput, latency, dropped packets — and plan for it:

  • Utilise multi-bitrate video encoding and delivery to anticipate variance in network performance, devices, and form factors
  • Offer HD for a living room lean-back experience but also expect users to watch from mobile devices, with network conditions in either case ranging from 3G to fiber
  • Design the client application to understand the video consumption process and enable it to more intelligently predict which video renditions will be optimal for the user based on predictive or session-information, e.g. average bandwidth, dropped frames, etc.

c. Ensure that proper quality of service (QoS) instrumentation is in place to measure delivery and consumption to identify external factors that are impacting the video experience and to better understand the consumer experience with both content and advertising.

#4. Alternative Distribution Methods

Finally, are there any alternative distribution methods that online video services should consider? A year ago we suggested an idea in which terrestrial broadcasters could win over both linear and binge viewers. The example we used was of ITV transmitting, as usual, one episode of Downton Abbey a week on television. At the same time – and as soon as Episode 1 of the new season had been aired – ITV would make the entire series available, on-demand, for a one-time cost (perhaps £15) to offset the possible hit on linear advertising revenues.

Similarly, Amazon could release the entire second season of Alpha House, bar the final episode, in one go with the promise that 11 weeks later (the number of episodes in a season) the final segment would be released. This would give viewers the chance to binge immediately – or stagger their viewing week by week. The choice is in their hands but ultimately everyone finishes at the same time so there would still be a space for one, huge, orgasmic watercooler moment at the end of it.

What are your thoughts? Has Amazon made a wise choice in shifting its distribution model from traditional to binge-worthy? Or will weekly episode releases make a comeback? Tweet us your thoughts @VODProfessional or leave us a comment below.

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