Amazon.com (NASDAQ:AMZN) launched an improved video service, which is perceived to be competing directly with YouTube, the video-sharing service owned by Alphabet (NASDAQ:GOOG) (NASDAQ:GOOGL).
The Amazon Video Direct (AVD) allows creators and storytellers to upload their video content, make it available to the customers of the e-commerce giant. They have the option to designate their videos free to view with ads, for rent or sale (one-time rental/purchase price) through a subscription channel or include it in Prime Video.
Creators can earn royalties from videos on Amazon Video Direct
According to Amazon, Content creators can distribute their videos directly to its Prime members and earn royalties based on minutes streamed.
Amazon will pay content creators 50% of the revenue earned from rental or sales of their videos. For ad-supported videos, they will receive 50% of the net ad revenues.
They can also expand their customer reach by making it available in any country where Amazon Video is available. Amazon Video is compatible with all devices smartphones and tablets powered by Android and iOS, Fire tablets and Fire TV, game consoles, laptops, and connected TVs.
In a statement, Jim Freeman, Vice President of Amazon Video, said, “It’s an amazing time to be a content creator. There are more options for distribution than ever before and with Amazon Video Direct, for the first time, there’s a self-service option for video providers to get their content into a premium streaming subscription service. We’re excited to make it even easier for content creators to find an audience, and for that audience to find great content.”
Michael Pachter, an analyst at Wedbush Securities told Reuters that Amazon’s new video service may not have a great impact on YouTube. According to him, “I don’t see 50 million Prime users making a huge dent in the 2 billion YouTube user ecosystem.”
On the other hand, Ivan Feinseth of Tigress Financial Partners, commented, “I don’t know if it’s going to totally disrupt YouTube, or even some of the other services, but for those that are heavy Amazon users, it will have an appeal.”
The stock price of Amazon increased nearly 3% to $699.58 per share at the time of this writing around 1:09 in the afternoon in New York.