What you need to know:

• Amazon is investing another $150m into Australian productions in a bid to "supercharge" the brand locally as the streaming wars heat up.
• Refusing to be drawn in on subscriber numbers, Amazon says Covid accelerated growth and firm appears comfortable as a complimentary service.
• Head of Prime Video Australia, Hushidar Kharas says the company remains "customer, not competitor focused".

Prime number

Amazon Prime Video has signalled intent to be a major player in Australia's intensifying streaming battle. It has invested $150m in 14 original series produced in Australia in a bid to cut through an increasingly cluttered market where Amazon currently plays third fiddle to to Netflix and Nine-owned Stan. 

The $150m, spent over the past three years and which has created some 2,500 jobs per the company, is "only the beginning" according to Amazon Prime Australia's Head of Content Tyler Bern. Speaking to Mi3 Bern and Amazon Prime Australia boss Hushidar Kharas said the business would continue to ramp up investment in local content in a bid to power a Prime operation which last year booked $90m of Amazon's local revenue. 

Declining to disclose numbers, the streaming platform is believed to have over 1.7m subscribers (Telsyte) or 3.29m monthly viewers (Roy Morgan), depending on the research.

However, Kharas said Covid restrictions had given the business a shot in the arm.

"The last 12-months have been fantastic, however, we were already on a very strong growth trajectory. Through 2020 we had the best run to date, as the circumstances really supercharged our business," Kharas said.

Growth driver

The drive for Prime subscribers should help power Amazon's local retail and advertising operations, the latter of which is yet to really take off.

Whereas in the US Amazon's ad business is putting a $15bn dent in Google's revenues, Amazon Australia made just A$21.8 million in 2020 from its advertising operation, according to financial records filed with the corporate regulator ASIC. As a share of Australia’s A$9.5 billion online ad market, that puts Amazon at just 0.23 per cent.

While Covid also boosted Amazon's overall Australian revenues north of $1bn for the first time in 2020, with online sales doubling to around $500m, the content executives are aware of the task at hand for its video business.

"It’s true, here in Australia video and retail are both parallel growth drivers for the brand. They are both working towards the same goal, as is the same with every market. But in Australia, video is certainly playing a more significant, yet even, role," Kharas said.

"That’s becoming the case in a few other markets too. We do need to break out of a lot of clutter in this market, but for video it’s a lot easier to do so than if you’re selling a bar of soap."

Channel planning

Despite a saturated Australian streaming landscape, Kharas told Mi3 the business is not unduly concerned and remains "customer, not competitor-focused".

He said Amazon views the streaming game in Australia as "anything but sum-zero", with consumers happy to have up to three different services at any given time.

"We are a brand in the midst of a cluttered environment and we need to find ways to cut through. Content has to come first but then we need to look at channel relevance," Kharas said.

"Prime targets sharply through digital platforms or [will] create stature for the product through mass media where necessary. We also go where the audiences are, such as TikTok, but then with sporting content we might rely more on above the line media. It's finding that balance."

Kharas also alluded to a technical overhaul of the platform in Australia, which he suggested would improve both the performance of the service and sharpen its pricing.

"There is some confusion and clutter in the market with the platform that we would like to bring in a tech solve for. However, this is not something that we can really talk further about at this time," he said.

"It's something we will bring in to make the product more convenient and price comparable. But we have to ensure we don't become too focused on who is doing what or developing what. We’re focused on our customer and product."