Will Amazon's miniTV service shake up Indian digital ad market?
The miniTV service sits within the Amazon.in shopping app and comes loaded with content from leading studios such as TVF and Pocket Aces
In a surprise and a bold move, e-commerce giant Amazon recently launched an ad-supported free video streaming service called miniTV in India. This is a global first move by the e-commerce company and India became the go-to market to test the new product. The miniTV service sits within the Amazon.in shopping app and comes loaded with content from leading studios such as TVF, Pocket Aces apart from leading comedians.
Apart from web series and stand-up comedy, Amazon miniTV also has food and beauty content. With this launch, Amazon has two video entertainment offerings – miniTV and Prime Video, which is offered as a complimentary service with Amazon Prime membership. Currently, miniTV is available on the Amazon app on Android with plans to extend it to the iOS app and mobile web over the coming months.
According to digital experts, the launch of miniTV positions Amazon.in as a super app that offers multiple services like e-commerce, payments, grocery and entertainment on a single platform. Furthermore, it will allow Amazon to grow its advertising business by opening up ad inventory and formats for its demand-side platform (DSP). It also allows Amazon to take on internet giants like Google and Facebook who corner a lion's share of the digital ad spends in India.
According to Kurate Digital Consulting Senior Partner Uday Sodhi, Amazon is testing miniTV in India for its eventual global roll-out depending upon its success in the country. The miniTV service will help Amazon gain insights into the consumption patterns of consumers.
"I think it's an early phase experiment for them. They have had various conversations globally on getting ad-supported video services for a while now. My sense is this is a test for a global launch because India is a large AVOD market and a key Amazon market. It is good to see that international companies are testing new products in India and if it works well then they will roll it out in the rest of the world. Also, it is giving them additional data on consumers and maybe it will help them in their e-commerce business," he stated.
Sodhi also noted that internet companies are increasingly moving towards becoming super apps by offering multiple services through a single app. "At the end of the day, everyone is moving towards the concept of a super app whether you look at Flipkart or Paytm or PhonePe. More and more big apps are moving towards the aggregation of multiple services on the same app and creating a super app. Amazon has got commerce, payments, grocery, and video. They are moving towards a super app concept," he added.
Concurring with Sodhi, Interactive Avenues VP Harish Iyer said that e-commerce and other digital players are moving towards becoming super apps. "If you look at all the internet businesses like Amazon, Flipkart or Zomato, they all started with one side of the commerce. Now what a user does outside of e-commerce are certain things that these platforms need to have so that the engagement rate goes up followed by time-spent. They can start cross-selling various other services that they want to push and that's exactly what they are doing. Right now, Amazon covers a whole lot of things right from payment, e-commerce to even content." Iyer noted.
Sodhi said that Amazon's DSP business will also benefit from the launch of miniTV particularly since it sits within the Amazon app. "They have a DSP and what this will do is drive supply from the Amazon side. This will give a decent supply of advertising. While they have demand on one side the supply will also help them. Also, they will have far more information about users and their behaviours so they will be able to do a better job of ad targeting," Sodhi said.
He also believes that Amazon will now be in a better position to taken on Google and Facebook.
AdLift Co-Founder and CEO Prashant Puri pointed out that the miniTV launch is part of Amazon's strategy to increase its share of the ad wallet. Amazon had a 4% share of the US digital advertising market in 2018 which has risen to 11%. Amazon is pushing really hard to eat into Google and Facebook's share.
According to Puri, Amazon's strategy is simple. Get users on the platform to consume video content and then monetise that consumption through advertising. "They want to build their DSP because that's where the advertisers are. Amazon is building that platform and adding that inventory. It is about adding that level of inventory. miniTV will also give them different ad formats," he stated.
Puri also believes that Amazon will go the whole hog to get the best content for its free platform since it has deep pockets as is apparent from their content investments in Prime Video. "Eventually, Amazon's strategy is e-commerce. They give all of these as freebies. Prime Video and Prime Music are complementary with Prime subscription. Their end goal is to get the consumer hooked on the platform. They don't want you to go to Facebook and Google," he added.
The big picture, Puri said, is that Amazon is taking on the might of Google and Facebook. "They want to get a larger share of the advertising spends and ad spends means bigger reach and ad formats. They have the reach and they are adding formats through miniTV. I don't see e-commerce platforms overtaking the likes of Google and Facebook. E-commerce advertising is small but it is growing and miniTV will help it to grow it further," Puri said.
Mirum India Director of Media Preetam Thingalaya feels that the growth in consumption of short-form snackable content must be one of the insights for them to move into such a model. "We all know E-com isn’t the only business Amazon is in. And when it comes to entertainment now they have Long format and short format content. It’s like the best of both the worlds of Entertainment. AVOD and SVOD. In a nutshell, If Content is King - Distribution is Queen and Amazon is both," he stated.
Thingalaya feels that the miniTV launch will fuel intense competition between AVOD platforms and bring down the media rates. He also feels that the app-in-app concept is a clever one. "Amazon DSP is doing really well globally and if they activate that for this AVOD service then it is just going to enhance their targeting parameters. So it is not equivalent to Google piece but it is a good start. It is good news for marketers. The best thing about Amazon miniTV is the app-in-app service. So consumers don't need a separate app as the content sits on the Amazon.in platform. The advantage with an app-in-app service is that you don't need to do a separate launch," he averred.
DAN Performance Group CEO Vivek Bhargava stated that Amazon’s revenue from advertisers is restricted to the shopping app primarily. The launch of miniTV would boost Amazon’s revenue through AVOD while it capitalises on the consumption growth that India has witnessed. Additionally, this will also allow Amazon to retain the sanctity of Prime customers with Amazon Prime Video which continues to feed content to keep users glued.
"It is safe to say that YouTube is one of the largest examples of such a service that exists, and I think it is a great or rather bold move by Amazon. It is, however, unclear if Amazon will follow a creator-based model like YouTube. Amazon is already a USD 30 billion advertising juggernaut, it has replaced Google search for product searches. India is a price-sensitive market so miniTV is an awesome strategy for Amazon to gain further market share for their e-commerce services," Bhargava said.
Bhargava also contended that the walled gardens are relying heavily on data and understanding of users’ consumptions/behaviours/
"Since the majority of ad spends on digital today happen on supply surplus platforms like social/OTT etc., it is only fair for Amazon to make a move like this. This move will help Amazon get a more horizontal view of their customer and therefore even benefit advertisers meet their advertising goals across stages of consumers path to purchase journey," he added.
Bhargava feels that the impact of miniTV on the AVOD will be interesting to watch. "From a viewer lens, this would bring a lot more stickiness to Amazon and overall growing trend of video consumption. From an advertiser’s lens, I think we’ll have to wait and watch since platforms like YouTube and Disney Hotstar have been in the game for a long time."
Kishan Kumar Shyamalan, chief growth officer & South- Head, Wavemaker India said, "Amazon today is one of the biggest digital destinations and one of the fastest growing digital ad platforms in the country. They are also one of the biggest investors in original content creation and acquisition. With changing consumer behavior, we all know how they made huge inroads into the otherwise monopolistic search market. The free, in-app, Mini TV is in my view their version to tap into the huge Indian video market and bring in synergies thereby with the Amazon ecosystem.
"The AVOD market will surely be keenly watching MiniTV as it can erode a lot of viewers from the current base. However, I also personally believe that Amazon is into category development by bringing more and more people into the Amazon ecosystem. Prime Video and MiniTV will serve different ends of the spectrum in doing so. Amazon has always been committed to original Indian content and their investments to ramp up regional content in the last few months is a testimony to their commitment. Now with MiniTV, they'll be leveraging a lot of their content partnerships to deliver both their SVOD and AVOD offerings. Now with video in, the possibility of doing last mile purchase data-driven full suite digital advertising possibilities on Amazon will be an interesting proposition for brands."
Iyer also feels that the success of miniTV is not guaranteed since it is a late entrant to the AVOD game. "I don't know how successful it will be because Amazon is a late entrant to AVOD. Flipkart and Zomato have also tried the content game within their apps but they have not succeeded. Amazon has created this miniTV piece for advertising because they realise that if they have to compete with the likes of Google and its video streaming platform YouTube then they need to have a video service," he asserted.
Iyer highlighted that most of the Google ad inventory comes from Ad Exchange which is Google's supply-side platform and Ad Exchange keeps a large chunk of the inventory from YouTube which is Google's own property. "In effect, while they are talking about programmatic advertising the money is going into Google-YouTube kitty. Maybe, that is what Amazon would also be envisaging in the near future."
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