November 3, 2013

Amazon pushing its Prime

The online retailer is disrupting the way TV programs get made and trying to change the rules for how consumers pay to watch.

By Jay Greene
The Seattle Times

(Continued from page 1)

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Two versions of the Kindle Fire

McClatchy Newspapers

Netflix said it has more than 30 million U.S. subscribers, more than double the number of Prime members, according to analyst estimates. (Amazon won’t disclose its subscription data.)

Providing streaming video is also a game Amazon needs to play. Just as consumers are increasingly reading digital books and listening to digital music, they are also watching digital versions of movies and TV shows. Amazon may be the largest seller of DVDs on the planet, but it knows that those sales eventually will be displaced by digital streaming. So it has created a business to do that, lest it lose those customers to Netflix and others.

To make that business succeed, Amazon recognizes it has to create buzz to get consumers to sign up for the service. Netflix is flourishing, in part, because it’s the only place people can watch hit shows such as “House of Cards” and “Orange Is the New Black.” That’s why Amazon is racing to offer a slate of new programs.

The company posted 14 pilots on its site earlier this year, and watched. As with other Amazon products, customers could give pilots anywhere from 1 to 5 stars.

But Amazon at its core is a technology company that uses data to shape so many of its business decisions. The company has the ability to peer into how viewers watch their programs, zeroing in, for example, on the number who watched the various pilots from beginning to end.

“It’s one thing to start an episode,” said Joe Lewis, Amazon Studios’ head of original programming. “It’s another thing to finish it.”

Viewers panned pilots such as a TV-adaptation of the movie “Zombieland” and “Browsers,” a musical comedy starring Bebe Neuwirth. Neither was picked up.

“Betas,” a comedy about life at a Silicon Valley startup starring Ed Begley Jr., made it through Amazon’s digital gantlet, as did “Alpha House.” (The company is also creating children’s programming using the same methods, and it’s just beginning to shoot a second round of comedy pilots, with shows featuring actors such as Jeffrey Tambor.)

Amazon Studios executives, though, are quick to point out that while the data guides their decisions, there still is a fair amount of old-fashioned gut-feeling at work as well. The data can provide insight, but it’s not yet clear which data points are best at predicting a show’s success.

“The key over time is to see which of those data points are most meaningful,” said Amazon Studios director Roy Price.

And while the digital tools are good at reading broad perceptions about a program, the company isn’t as interested in using them to shape story lines.

“You get into more shaky ground if you’re looking to the community to make creative choices for the show,” Price said.

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