nScreenMedia OTT multiscreen media analysis

Despite denials, Amazon free ad-supported linear is coming

Last week Amazon was reported to be prepping a raft of ad-supported live and linear channels. Though the company was quick to deny it, the approach makes perfect sense. Expect the channels to start to arrive later this year.

Amazon denies a strategic shift toward linear and live channels

Last week, rumors were flying that Amazon was preparing to launch linear 24×7 programming via its Prime Video service. Janko Roettgers, a reporter with Protocol, said an unnamed industry insider had told him that Amazon was actively engaged with programmers to license live and linear channels for the service. He also pointed at Amazon job listing where live/linear channels were called out as a focus of the work encompassed by the positions.

Amazon was quick to deny the rumor. In an email sent to Next TV last Wednesday, the company said the job listings related to existing live and linear services currently available through Prime Video. It went on to say the job listing did not signal any strategic expansion of linear services.

Amazon already delivers live and linear channels through its video service. In the U.S., CBS All Access provides local affiliate TV channels to customers subscribing to its service through Amazon’s Channels program. In Europe, Amazon Channels also provides Discovery Channel and Eurosport, both linear channel offerings.

Whether Amazon is or is not planning a massive increase in linear and live channels through Prime Video, it should. The approach is needed to help the company’s stated priority of building a successful video ad business.

Online linear TV channels are hot!

Online linear TV leader Pluto TV has experienced extraordinary growth in the last year or so. At the end of 2018, Pluto TV had 12 million monthly active users (MAUs.) Pluto TV, which became part of ViacomCBS in 2019, had 24 million MAUs at the end of Q1 2022. It also looks likely to reach its stated goal of 30 million by the end of the year.

What’s more, linear channels get high engagement. Jeff Shultz, EVP and Chief Business Officer of Pluto TV, says the company counts viewing sessions in hours:

“It’s things like the binge-watch channels that we have, which are deceptively popular. Bay Watch, Leverage, Unsolved Mysteries, and counter-intuitive examples like This Old House and Antiques Roadshow, these <channels> are running 24-hours a day. People will discover them in the linear guide and end up watching for hours. It is one episode after another after another.”

More people than ever discovered and engaged with online linear channels during the C-19 emergency. According to Katherine Pond, Vice President of Business Development at Vizio, the company’s free ad-supported TV channels available through its smart TVs showed a 108% increase in use between March and April 2020.

Amazon needs a boost in viewing times

According to Nielsen, Amazon Prime Video is running dead last behind Netflix, YouTube, and Hulu in terms of its share of streaming minutes. As of April, Amazon had an 11.3% share, five-times less than Netflix.

Nielsen streaming data Feb-Apr 2020

The poor performance must be vexing to Prime Video. The company turned its attention to the ad market with the launch of IMDb Freedive (later renamed IMDb TV) at the beginning of 2019. The content, which can be accessed directly from the IMDb mobile app, is also tightly integrated into the Prime Video experience.

For IMDb TV to be successful, the company needs to generate much longer viewing times to drive more ad views. Unfortunately, with on-demand viewing, each show end is an opportunity for a viewer to switch to something else. Linear channels, with their long dwell times, fix that problem. Live linear offerings such as news and sports are doubly effective at keeping viewers tuned in.

The proven linear model, coupled with Amazon’s ocean of user purchasing and viewing data, makes the company uniquely placed to give advertisers everything they want. Live and linear channels are the perfect vehicles to deliver.

Why it matters

Amazon has denied making a strategic shift toward live and linear TV channel delivery.

However, free ad-supported live and linear channels are experiencing explosive growth online.

Amazon is uniquely placed to capitalize on ad-supported linear and won’t shy away from the opportunity.


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