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Can Amazon be the next Netflix?

Can Amazon be the next Netflix? Can Amazon be the next Netflix? Can Amazon be the next Netflix? Can Amazon be the next Netflix?
04/22/16
1/4
by Eunjin Koh
Amazon has been a small player in the online video streaming market through Amazon Prime. For $99 a year, members can enjoy benefits like free shipping and full access to music, movies and TV offerings. However on April 17, 2016 the e-commerce focused brand announced it will release a stand-alone video streaming platform called Amazon Video. Under the new plan, customers will have access to the video service for $8.99 a month or $10.99 a month including full Prime services. The new plan not only benefits customers seeking the greater flexibility of monthly payment but it also positions Amazon more aggressively in the video streaming category. Amazon has become one step closer to not only being a prime destination for online shopping but also quality entertainment.

Although the online video streaming market is already much crowded, Amazon can certainly bring a real threat to Netflix because Amazon has the brand name, the customer relationships, and the focus on high-quality consumer experiences. The only concern Amazon has is to break out of the “retail-only” image. While Netflix is known for its high quality, popular content Amazon’s main brand value is still retail. With this new video-only product, will Amazon be able to compete head to head with the online video streaming giant Netflix?

Millennials are the core audience of online video content and Netflix, Amazon and Amazon Prime are highly established brands among this group.

Netflix

The Amazon brand can benefit from the positive synergy between Amazon and Amazon Prime. Although they are both leaders with trustworthy, reliable personas – Amazon is more valued for its caring, fun and down to earth image while Amazon Prime is seen as more trendy, intelligent and high in quality.

Netflix 1

When comparing Netflix to the overall Amazon brand, both are seen as popular brands of good value and high quality.  However Netflix is more visionary, up to date and innovative while Amazon is valued more for trust and reliability. While maintaining its customers’ trust, Amazon can leverage Prime’s unique trendy and intelligent values to differentiate Amazon Video form Netflix.

Netflix 2

Furthermore, because Amazon already has a large customer base this can be transcended to Amazon Video.  One thing to watch out for is Prime’s level of lapsed users. While Amazon only has 6% lapsed users, Prime has 15% followed by Netflix which has 12%. It might be useful to understand why 15% of Prime users decided not to return.

Netflix 3

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