Making sense of Amazon’s miniTV
A month ago, Amazon launched its new video streaming service called miniTV here in India. It slotted itself inside the e-commerce platform on its mobile app and offers curated content across a variety of categories like web series, comedy shows, tech, food, beauty etc.
Flipkart had started a similar offering called Flipkart Video back in 2019 and with miniTV, the two biggest e-commerce players now have an integrated OTT streaming service. But what could be the motivation behind these products? Is this an attempt to drive incremental sales in the marketplace or the beginning of the creation of super apps? I believe it's the former.
Motivation
We must first take a step to back understand the strategy behind the amazon prime membership. Amazon bundles several different benefits that include free deliveries, prime video, music and other prime specific deals on Amazon itself. The whole premise is built around the need to keep customers tied to the Amazon ecosystem. There is no doubt that e-commerce is the core business and all other business units support it. Let's look at Prime Video, which shares its subscription fee with the parent company. Hence Alice, who doesn’t shop on Amazon but is interested to watch the new exclusive show must subscribe to the whole deal that comes with all the bells and whistles.
Now, e-commerce is a scene where there’s very little customer loyalty because of little switching costs. We’ve all compared the same product on multiple platforms to see where we can nab it at a lower price. With very little to differentiate the buying experience, it almost always comes down to prices. But now armed with the prime subscription, Alice is inclined to shop from Amazon and take advantage of the prime benefit offers on the table. And thus with increasing subscribers, Amazon not only drives its subscription revenue but also increased sales on its marketplace. In 2020, net sales on subscription services amounted to 25 billion dollars. Source: Statista
For a user who paid for prime to only avail the benefits on e-commerce the Prime Video is essentially free or a bonus. But objectively, Prime Video still sits behind this paywall. For a price of Rs 999 a year though, Prime Video alone would have been a strong value for money when compared to the likes of Hotstar, Netflix or other local players.
So where does miniTV come into this mix? If Amazon had to introduce a freemium model of its OTT streaming service, why not do it in Prime Video itself? Thus, users could watch the free content, get hooked and undoubtedly some would convert to the premium tier. This would eventually also affect amazon sales as explained earlier. But in this scenario, the new user acquisition is happening on Prime Video which is a different app altogether. The conversion funnel from a free user on Prime Video to a premium viewer and finally to a shopper on Amazon is a long one. Instead, Amazon wants to use this free content lure to directly impact user acquisition and engagement on Amazon.
Point-of-purchase merchandising uses strategically placed products — usually near the front of the store or by the cash register — to spur consumer impulse buying. Now, even the staunchest Flipkart user won’t be able to avoid the homepage banners showcasing the best deals. We are human after all and just as a supermarket entices us to buy unwanted items when waiting in the queue, we are here being compelled to explore.
Road Ahead
The tagline reads Always Entertaining, Always Free. While miniTV is ad-supported and thus ad revenue would be an additional source for the company, this in no way should be the priority. At the moment, the selection of offerings is limited and even some of the basic functionalities that are expected in an OTT streaming service are absent. There isn’t even a search bar or a way to filter the content. For now, we have three broad categories comedy, lifestyle and web series to choose from.
This is truly an MVP and the PMs at Amazon will surely be keeping an eye on the growth metrics of miniTV but more importantly, is it increasing user engagement and sales on amazon significantly? If this is not just an experiment and Amazon does decide to stick with it, I can envision a future where users can get links to directly visit the pages of products discussed on a video.
For example, a tech video comparing smartphones will have embedded links to visit the respective smartphone product pages. Or in a video where a fashion expert guides viewers on the latest summer style, a single click could help the user look at all the products that replicate the same look. We should not forget that this would also be another data source for Amazon and the type of content user watch could be used to improve recommendation further. The scope is endless and I eagerly look forward to the developments that take place in this perenially running race for e-commerce domination.
