Too Much TV: Your TV Talking Points For Monday, January 29th, 2024

When Grace was notified last month that Prime Video would soon include commercials unless he paid extra, he immediately canceled his Prime subscription, forgoing the free-shipping perk and vowing to stop shopping from Amazon altogether.

“There is only one way to show them that this is not OK: to cancel,” said Grace, a 27-year-old gig worker from Sharon, Pa. 

I don't doubt that a few people feel this way. But highlighting them in a story about the addition of advertising on Prime Video is more than slightly misleading.

And notice that I didn't describe the change as a "price increase," even though that is the way I've seen it framed in 90% of the stories written today about the move. You can keep your subscription as is and it won't cost you one additional cent. You'll just have to watch a few commercials. 

It's somewhat amazing to me how many customer's brains seem broken when it comes to watching advertising for a service that also charges a subscription fee:

Any amount of advertising is a no-no to many. “If I have to watch ads, I shouldn’t have to pay for my entertainment,” said Joel Gratcyk, a 42-year-old digital consultant from Chicago—a lesson he said he learned from all those years watching Netflix. He decided not to renew his Prime subscription when he found out about the new ad-supported Prime Video. 

I don't mean to be unkind, but this is just idiotic. If you are 42-years-old, you've no doubt subscribed to cable or satellite television in the past, which is a business built on both advertising and a monthly subscription charge.

This change is happening for two reasons, neither one of which is receiving much attention in the press.

First, this move is a back-door way for Prime Video to increase its revenue. Simply raising the price for Amazon Prime would mean that the video product would only receive some small percentage of the money, given the many services that fall under the Prime umbrella and would share in the increase.

Secondly, this reflects the reality that Prime Video would likely not be a very successful streaming service if it was a stand-alone product. Industry reporting frequently touts Amazon Prime's total subscriber number and extrapolates that in a way that makes Prime Video sound as if it has one of the largest SVOD subscriber bases in the world.

Amazon has never released any clear indication of how many Prime members actually regularly use Prime Video. But I was told by an Amazon executive on background a couple of years ago that the number of subscribers who regularly use Prime Video more than any other Amazon Prime membership benefit is typically in the "single digits." On the other side, the number of Amazon Prime subscribers who aren't regular Prime Video users (in this case, opening the app at least five times a month), is morethan 50% of the total Amazon Prime subscriber base.

Assuming those numbers are in the ballpark of being correct, then Amazon's decision to include advertising inside its core Prime Video service is a no-brainer. Most current subscribers might not love the idea of a few ads. But if Amazon keeps the ad load low, it won't have much of an impact on the subscriber base. Most casual Prime Video users aren't going to drop Amazon Prime just because they find a few ads annoying. The move may convince them to watch Prime Video a bit less. But the overall ad revenue from everyone else should more than make up for the loss of a few malcontents.

And for that small number of hardcore Prime Video customers who decide to pay the $3 a month to watch without advertising, that fee is basically found money for Prime Video. It's money the service would be hard-pressed to get any other way and it helps shore up Prime Video's bottom line over the next several years.

So journalists...please do better. 



TUESDAY VIEWING SUGGESTION
Although I can't officially post a review of Netflix's NASCAR: Full Speed until it goes live on the service in a few hours (insert rant about pointless embargoes), I will say the series is exactly what you would expect it to be. Huge NASCAR fans will no doubt love seeing some of the behind-the-scenes moments. But like Netflix's other sports series like Quarterback or Formula 1: Drive To Survive, this series is really made for the casual sports fan. It's sports-adjacent television and in the case of Full Speed, you'll find the series a lot more entertaining if you don't follow NASCAR closely enough to know who won last season's championship. BTW, here is a photo gallery of a few images from the series.