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Amazon (NASDAQ: AMZN) is making it easier for non-Prime subscribers to check out its original shows. The leading online retailer uploaded the first episodes for 10 of its original shows to YouTube on Monday.
From The Man in the High Castle to Mozart in the Jungle to Emmy-magnet Transparent, Amazon is taking the same approach to its platform as a shopping mall chicken chain wielding toothpicks in order to get samples into the mouths of customers.If folks like what's on the toothpick -- or in Amazon's case, any of the introductory TV shows -- they may warm up to the full meal.
Amazon has offered its pilots for free in the past, often as a way to test the shows that it should green light for full seasons. However, that vetting process has taken place through Amazon's own site. Now, it's leaning on the leading hub for free videos to garner attention. Amazon's also uploading the full initial episodes to Twitch, the gaming video-clip website that it acquired two summers ago.
It's not a bad move. Many of Amazon's shows have attracted critical acclaim and even industry awards, but the platform's popularity is a far cry fromNetflix(NASDAQ: NFLX). Despite making Prime Video offerings available to its tens of millions of Amazon Prime members at no additional cost, Amazon is not dominating streaming consumption; that honor goes to Netflix. There's nothing to lose by turning to a rival hotbed like YouTube to woo viewers, but we have to be realistic in terms of what there is to gain.
Amazon's episodes on YouTube aren't exactly a hit out of the gate. The Man in the High Castle -- the dystopian series that poses an alternative historical reality where the Axis wins World War II -- has been the biggest draw as of Wednesday morning, with a little more than 1,500 views. None of the other shows has attracted more than 300 views.
That's a shockingly low number on a site where it's easy for quality clips to get noticed. Netflix doesn't have anything to worry about with this particular Amazon gamble -- at least not yet.
It's obviously too early to tell if the videos will catch on. Amazon isn't going to be shouting about this availability from the rooftops because YouTube is, in a sense, the competition. The views will trickle in over time, and that could be enough.
Amazon's endgame is simple: If someone likes The Man in the High Castle, the other nine episodes of the first season are only available on Amazon. That can only grow the audience and anticipation for the second season, which will debut in December.
More people watch video on YouTube than Amazon. More people have the YouTube app on their mobile devices than Amazon's video-streaming application. YouTube is featured more prominently on video-game consoles, cable-provider boxes, Blu-ray players, and most set-top devices than on Amazon's video solution. Amazon is committing billions to original content, and now it needs an audience.
This shouldn't worry Netflix, in theory, but it does come at a time when subscriber growth has slowed dramatically. The stock plunged 13% in a single day last month after Netflix revealed that it fell short of its subscriber growth for the second quarter -- attracting just 1.68 million net additions instead of the 2.5 million it was originally targeting -- with an uninspiring forecast for the current quarter.
There's plenty to gain
Netflix still has a seemingly insurmountable lead over the competition in terms of premium subscribers and actual consumption, but it's Amazon that has more to gain if it actually evolves into the streaming platform of choice. It's the one that offers piecemeal rentals and digital purchases of the shows and movies that aren't available in the "free" Prime Video catalog. If Amazon had Netflix's audience, can you imagine how much money it would be making from digital purchases and rentals?
Netflix doesn't care about those things, and that could very well be why it's the top dog. There's something to be said about focus and doing one thing ridiculously well.
However, with Amazon's history as a disruptive swashbuckler, the fact that it could be using Prime Video as a gateway drug for its ecosystem of digital purchases makes it hungry -- and dangerous to Netflix. Putting its pilots on YouTube this week is the next step, but it won't be the last one.
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Rick Munarriz owns shares of Netflix. The Motley Fool owns shares of and recommends Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.