The online service has launched a free streaming service in Germany.
(Photo: Reuters)
Dusseldorf Surprisingly and without much announcement, Amazon launched a new streaming service in Germany on August 1st. Under the “Freevee” brand, the online mail order company shows films and series free of charge, which, however, are interrupted by advertising.
Amazon is thus following a new trend in the streaming market. Many providers are currently introducing a cheaper or free, advertising-financed subscription model. In times of rising prices, companies want to retain customers for whom a standard subscription is too expensive.
Apparently Amazon is worried about losing too many of its current 200 million customers worldwide as a result of the significant price increase for the Amazon Prime subscription service. The fee for use in Germany will increase by around 30 percent from September 15, from the previous EUR 69 to just under EUR 90 per year. In addition to the commercial breaks, the free alternative Freevee not only offers significantly less video content.
Unlike Amazon Prime, customers do not get a music streaming service or benefits when ordering goods, such as faster delivery. Freevee is a video-only service. An Amazon spokesman promises a mix of its own productions, external films and series that are in the portfolio through licenses. Linear TV channels are also to be added in the future. The group did not name a target for Amazon Freevee customers in Germany. Freevee was already available in America and Great Britain, and the launch in Germany was expected for the current year.
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Amazon Freevee can be reached via the Prime Video website and is also available in the corresponding mobile phone and smart TV apps. Users only need to log in with a free Amazon account. The service currently shows two commercials, each 30 seconds long, for 30-minute series episodes. That is significantly less advertising than in classic linear television.
Netflix and Disney are also planning tariffs with advertising
Even industry leader Netflix recently announced that it wanted to introduce another tariff that, in contrast to the standard tariff, is financed by advertising. The US group had resisted this for a long time, but is reacting to increasingly weakening growth.
In the first half of 2022, Netflix had lost over a million customers worldwide. At Netflix, the advertising variant is scheduled to start in selected countries in early 2023. Disney plus is planning an advertising subscription initially in the USA, and then internationally in the coming year.
The advertising-financed streaming service started in Germany in August.
(Photo: dpa)
Amazon justified the strong price increase for Prime in addition to inflation with the fact that the video offer had been significantly expanded. Parts of it are now available for free, albeit in a significantly slimmed-down form. That could annoy Prime customers, especially after the significant price increase.
>> Read more: Almost a million fewer customers: Netflix is losing subscribers again, but the competition is growing
What Amazon could benefit from: Many German customers appreciate Prime primarily because of the discounts when shopping. There are not only faster and sometimes free shipping options, but also special offers for Prime customers, such as on Prime Day.
Germans would already pay to use the Amazon platform
A study conducted last year by the retail research institute IFH documents how willing to pay among German Amazon customers is in general. In a survey, Amazon customers stated that they would be willing to pay between 11 and 15 euros just to use the Amazon platform. Additional Prime services were not even included.
According to e-commerce expert Eva Stüber from the IFH, Amazon is seen by more and more customers as systemically important in German retail. “With the Prime program, they are excellent at retaining customers on the platform,” says Stüber. It is therefore likely that many customers in Germany in particular will continue to pay for Prime despite the price increase.
Whether Amazon Freevee will be a success is not certain. True, in the US, the average According to data from market researcher Kantar, the number of streaming subscriptions per household has risen from 3.1 at the beginning of 2021 to 4.8 most recently – mainly driven by cheaper advertising subscriptions. But a study by the strategy consultants Simon, Kucher & Partners also shows that the willingness to accept advertising in streaming services is less pronounced in Germany than in almost any other country.
More: Amazon is growing faster than expected – the share is rising sharply