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A new service has appeared in the maze of streaming offers. Amazon is behind this and is looking at the German advertising market. Will free streaming really compete with the subscription models?

Berlin.

There are signs of a trend in the booming streaming market. It is nothing new in itself for the Germans. For decades we have been used to the fact that commercial television flashes into our living rooms and public advertising selectively in the television program.

US internet company Amazon is also focusing on ad revenue with its new streaming offering. Users watch series with ad breaks, but it’s all free. How strong will this trend be in this country?

When streaming was born, that is, downloading content of moving images on the Internet on platforms, in addition to continuous, predetermined television programming, many providers relied on subscription income instead of advertising. Netflix, Disney +, Apple, DAZN, Sky, and Amazon with Prime Video streaming service rely on the subscription tab. Many Germans like to stream and have multiple subscriptions at the same time – Netflix and Amazon are at the forefront of research and market observers in the country.

advertising instead of costs

There are also mixed models: for example, the RTL + platforms of the RTL Group and ProSiebenSat.1 Joyn offer free advertising-funded offers, while subscription models are also available on these platforms. Now streaming ad financing is gaining thanks to Amazon. The advertising market is attractive to video providers, as has been seen for decades in the TV market where billions of sales are generated. Or on Youtube.

A closer look at the Amazon Freevee deal, which launched on Wednesday: movies and series are shown at no extra cost, but with ad breaks. Germany is the third country to post this offer, after the US and UK.

“We offer users an offer they would normally expect on a paywall,” said an Amazon spokesman for a German news agency. It will be a mix of in-house productions, freelance movies and series that are in the portfolio under license, and perspective linear TV channels. Amazon Freevee will initially offer themed linear live channels – such as BBC Food and BBC Travel. All channels are available in German.

Austria should follow

Amazon’s co-head of content, Ryan Pirozzi, told dpa of Amazon Freevee’s goal: “We want to reach as many customers as possible.” The group did not target Amazon Freevee in terms of customers and sales in Germany. Austria is set to be the next European country at a later date.

Amazon is already in the streaming market with Prime Video. The moving picture service is part of the Prime subscription, so you can also listen to music or save on shipping costs when shopping on Amazon. Recently, the subscription price has increased.

Goldmedia, a consulting and research firm, sees the possible effects of Amazon’s new free service. Goldmedia Managing Director Klaus Goldhammer told dpa of the offer: “This could restart the streaming market in Germany.” Those who have so far avoided subscriptions can now be attracted. Likewise, young people who have no purchasing power.

Goldhammer also assumes that this will have an impact on the traditional TV advertising market. Line of private broadcasters such as RTL Group and ProSiebenSat.1 can face the competition as advertisers can switch to Amazon Freevee. Goldhammer added that new competitive pressures could arise with public service broadcasters from ARD and ZDF, which are currently expanding their media libraries and streaming services. As people who wanted to stream without subscriptions and found what they were looking for on ARD and ZDF now have another option to choose from. (dpa)

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