May 12, 2016

Will Amazon Video Direct Change the Streaming Game by Letting Creators Choose How to Get Paid?

Amazon's new streaming service is a YouTube/Netflix Hybrid.

In an attempt to make their streaming service more appealing to content creators, Amazon has launched Video Direct, which allows anyone to upload and get paid per hour streamed.

If you have spent any time researching what Amazon Video Direct is all about, you've most likely seen it touted as a direct competitor to YouTube, in that it allows anyone to upload their own content, whether it's feature films, shorts, web series, or music videos, and lets them decide whether or not to make viewing that content free.

However, what's different about Amazon Video Direct is that it gives users four options on how to earn royalties from their work. According to Amazon, this is how that breaks down:

  • Buy or rent: Content providers can allow viewers to buy or rent their work and receive 50% of net revenue.
  • Included with Amazon Prime: Providers can make their content available on Amazon Prime and earn $0.15 for every hour their content is streamed.
  • Free with ads: Providers can make their content free with ads and receive 55% of net advertising revenue.
  • Add-on subscriptions: Providers can make their content available only to those with add-on subscriptions and receive 50% of net monthly revenue.

It does seem like Amazon Video Direct is in direct competition with YouTube with their "free with ads" option, however Vox made a very interesting point about how paying content creators based on hours streamed makes them a bigger threat to the juggernaut streaming service Netflix — and here's why:

Right now you can earn a living making ad-free television shows, but to do it you need to talk executives at Netflix or HBO or Showtime into paying you. What Amazon is doing is saying anyone who wants to can make a show with an absolute guarantee that if the show proves popular they will get paid.

Think about it, getting your film or show onto Netflix is kind of like getting drafted onto an NBA team; your content is first scouted and added to the Netflix Database, and once it's on that database, there needs to be a high enough queue demand in order for Netflix to consider your content further.

What Amazon Video Direct does is gets rid of the draft and lets everyone play, ensuring that those who produce the best, most heavily streamed content will get paid for it. No scouting, no database, no waiting for Netflix to see some kind of value in your film.

If you think about it, parts of AVD is kind of like a YouTube/Netflix hybrid: anyone can upload content and get paid per hour streamed — which sounds pretty promising for indie filmmakers looking to distribute their work and earn some money in the process.      

Your Comment

7 Comments

I wonder how amazon is going to handle the IP problem.

May 12, 2016 at 6:39PM

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Edgar More
All
1142

At first glance, I thought it said ".15 per minute" and I thought...not bad. Then I realized, it's .15 PER HOUR. And I thought...not good. Then I read the information on their website and realized, it's capped at 500,000 hours per year per title. So if your movie gets viewed at the maximum rate, you stand to make $75,000 for the year (before taxes). So, if you have a 90 minute film and 333,333 people watch it in it's entirety, you can make 75k minus tax. That's a lot of people...it's not much money. And the final insult, if a million people watch your film in it's entirety...you still get only 75K...minus taxes.

Is this the future? If so...it's depressing.

May 13, 2016 at 11:29AM

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jfc
Director/Writer
95

Thanks for doing the math, jfc, that's awesome. $75K for the world's biggest market is not going to get many films made. It will probably dig up thousands of dud films from the archives though. Obscure old films are about to become a lot more accessible. As Edgar More mentioned, figuring out who has the rights to upload and be paid for these works will be extremely complex. Pirates will get rich first and then Amazon when they confiscate most earnings for themselves ("you can not adequately prove ownership of Teenage Werewolf Prom Queens").

Vimeo already did this (Vimeo on Demand) better. Screw Amazon (and I'm a Prime member).

May 13, 2016 at 7:29PM

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Alec Kinnear
Creative Director
532

Yeah, it all sounds pretty rosy, until you do the math.

May 13, 2016 at 11:36PM, Edited May 13, 11:38PM

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jfc
Director/Writer
95

15 cents per hour sounds similar to YouTube payments, which are less than a penny per view (not sure how that compares by length). Instead, you can charge for your movie and then get 50% of net. So, a $5 movie with 30,000 views could yield that same $75K... if people were willing to pay for video...

May 18, 2016 at 4:59PM

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I have not gotten a clear answer on this. It's 15 cents per hour capped at 500 hours per year per title IN THE US. When people watch in the UK, it's currently listed at 6 cents per hour. So while your film may be streamed for 500,000 hours, you wouldn't earn $75k if 20% of your customers are from the UK. Your payment would be $63,750 for what was streamed in the US, and $4,500 for what was streamed in the UK, so your payment would be $68,250, and the more people that stream overseas, IF it all applies to the same cap, the lower your payment would be. Let's be honest though, they don't restrict you by saying it has to be exclusive to Amazon, so you can still be on YouTube and Vimeo so you can be on multiple platforms. I uploaded my indy film here and in just over a month it's been streamed 1.5 million minutes because I've promoted it using targeted Facebook and Twitter Ads. I am making $3 for every $1 spent promoting. You're taking a chance that your film could be streamed millions of hours and you've been capped, but honestly, isn't this a great opportunity for us as it is? Personally, if I can watch a film on YouTube, Vimeo, or Amazon, I watch on Amazon, it's a very stable platform. I, like many, would HOPE I reach the cap and be happy. If my film cost $500k to produce, Amazon Video Direct would not be my first choice, I'd use an aggregator and try to put it on Netflix or VOD. If my film was very low budget and I was hoping for a cult following, which is the case in my film, AVD is a GREAT choice. It costs nothing except the price of having closed captioning done, which I used a company called Rev.com and the cost was $1 per minute. That Closed Captioning file can be used anywhere you put your film. YouTube, I believe, does the Closed Captioning for Free. Anyone that wants to ask me questions about getting CC done or preparing a file for Amazon, or how I marketed for cheap using Facebook and Twitter Ads, feel free to email me at nigel@nigelbach.com. I'll gladly share what I've learned.

November 5, 2016 at 9:50AM

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JFC, I agree that it's not very much money. On the flip side however, if you have a title that can generate 500,000 hours yearly I'd suggest gathering data up to a few hundred thousand hours and the time-frame it takes to get there and approach other platforms/distributors with that data to parlay into a cash guarantee or more advantageous monetary deal with Amazon directly. They wouldn't want to lose a title that popular and you can always drop it to the pay tiers once it builds a following via Prime. Continue developing your O&O (owned and operated) site and use the Prime version to upsell a Director's Cut or a bundle of all your films. Not perfect, but access to Amazon's great recommendation algorithm makes it compelling.

December 20, 2016 at 4:12PM

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Zack Coffman
Head of Content, Distribution, and Strategy
86

depressing.

June 3, 2016 at 11:27AM

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P41
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