Reports: Amazon plots new ad-supported video service, as Facebook expands Watch globally
- Amazon is reportedly launching an ad-supported video service for its Fire TV device users, according to Reuters, which cited a report in The Information. Amazon's new video service appears similar to competitor Roku's newly launched Roku Channel, which airs old movies and TV shows and has relied on ads, per Fortune.
- The new offering, which may be called Free Dive, will be separate from Amazon Prime, the ad-free subscription service. IMDB, Amazon's movie and TV information site, is reportedly developing the service, and Amazon is working with major studios to license older TV shows for it.
- The Information report comes as other major digital companies are expanding their premium video offerings. Facebook yesterday announced in a blog post that it is making its video platform Watch available globally. In the U.S., more than 50 million people watch at least one minute of videos on Watch, and the total time spent watching videos on the platform has increased 18 fold since the first of the year, according to the social network. Facebook also said it is expanding its Ad Breaks program to help partners monetize their video efforts.
The market for digital streaming and on-demand video continues to intensify, as platforms are vying for subscribers who have no shortage of options to turn to. Amazon has been pushing its video efforts harder to gain more Prime members, who can also access its e-commerce platform, music streaming service and more.
Rumblings of an ad-supported offering separate from Prime come as Amazon's advertising sales business has quickly accelerated, growing 132% to $2.2 billion in the most recent quarter. Advertising sales grew 129% year-over-year, making it the fastest growing category for the Seattle-based company.
Americans are also cutting the cord at a faster rate than expected, which means video platforms will need to do more in the near term to win over eyeballs and keep an edge on their competitors. According to eMarketer, 32.8% of U.S. adults will forego their cable and satellite TV services in 2018 in favor of over-the-top services like Amazon, Hulu or Netflix. Cord cutters will grow to 39.3 million by 2019 and 55.1 million by 2022, the researcher said.
Facebook is similarly ramping up its video offerings with the global expansion of Watch. However, Watch has struggled to gain a following in the U.S. A recent survey by the Diffusion Group revealed that half of adult Facebook users have never heard of Watch, and 24% have heard of it but haven't used it. The social giant has made several adjustments to the platform to gain new viewers and attract advertisers since it launched in August last year.