Changing – or missing – the point about success in TV?
The requirement for people to pay up, plus the fact that Prime is available only in the US, Germany, and the UK, means that Ovum forecasts that it will have just 16.4 million active users of its video component between those markets by the end of 2016, the year in which the first season of its new car show is due to debut.
The online retailer does plan to launch in Japan next month and is likely to extend the service to other countries, but clearly its car show is unlikely to reach more than a fraction of the audience Top Gear has enjoyed.
Would that make Amazon’s investment in Clarkson and co a mistake? Not necessarily. Part of the retailer’s strategy will be about earning more revenue per viewer from a smaller audience compared with the BBC. A back-of-an-envelope calculation suggests that Prime could be generating over $1.7 billion in annualized revenues from active Instant Video users in US, Germany, and the UK alone by the end of 2016.
And to Amazon, succeeding with Prime will be about more than just TV. It’s about ensuring it’s the go-to place for consumers to buy all manner of products and services. Alongside funding other original TV shows and movies, a subscription includes a music-streaming service, an e-book lending library, and free next-day delivery for physical goods ordered via Amazon.
Clarkson’s Catch 22: Super-rich or super-famous?
But Clarkson and co’s stock could diminish as the move from the BBC’s global network of Top Gear licensees to Prime’s relatively small walled garden takes them out of the public eye. In other words, as they become less visible, they become less popular, and as they become less popular, they become less visible, and so on. As noted in a previous article, a number of sports have seen marked declines in audience numbers after going behind the pay-TV paywall.
One way to counterbalance this threat – and grow revenue – would be to extend the car show’s content and the star’s brand to other methods, such as online rentals, download-to-own, physical discs, social media, licensing to TV services in markets where Prime isn’t present, and delayed pay-TV and free-to-air release windows. The challenge would be ensuring the show remains exclusive enough to attract Prime subscribers.
In any case, companies looking to take very public talent like Clarkson private should be very mindful of the fact that traditional TV is the main vehicle that has driven – if you’ll excuse the pun – and sustained their stardom.
It may be, as some cynical observers suggest, that the Top Gear trio couldn’t care less about the oxygen of publicity given the amount of money they are being paid. But part of me imagines Clarkson in 2020 in a scene reminiscent of a great movie about another period of transition in media’s history, Sunset Boulevard:
Rebekah Brooks (chief executive of the UK arm of Rupert Murdoch’s News Corp and member of Clarkson’s infamous “Chipping Norton set” of friends): “You’re Jeremy Clarkson. You used to be on traditional TV. You used to be big.”
Jeremy Clarkson: “I am big. It’s just the TV platforms that got small.”
In Sunset Boulevard, the egomaniac main character, Norma Desmond, is clearly delusional. Her fame failed to translate from the silent movies to the “talkies.” If anything, the pictures got bigger as dialog brought in a larger and more engaged audience.
For Clarkson, however, the situation would be literal. Amazon and other emerging premium platforms will attract considerably smaller audiences than traditional TV for years to come, no matter how much exclusive content they buy.
Getting the right balance between exclusivity and exposure to ensure financial rewards do not undermine fame will be vital not just to Clarkson and Amazon, but all media players looking to build sustainable audiences and business models.
Clients of the TV & Video channel of Ovum’s Knowledge Center research portal can access our latest online video forecasts broken down by Netflix, Amazon, and over 40 other subscription-based video on-demand (SVOD) service providers for Europe here and the Americas here. Ovum will publish similar forecasts for Asia Pacific and Middle East & Africa later this year.