Understanding what series new Prime signups watch helps the company evaluate the cost of acquiring new members as well as the performance of its shows, internal company documents reviewed by Reuters reveal. Amazon believes that its video programming helps draws people to join Prime, although the documents don’t show how the company justifies this belief.
Amazon measures “cost per first stream” as a clue to how video helps lure Prime subscribers. The metric divides the production and marketing costs for a series by the number of people who streamed that program first after becoming Prime members.
Do you remember the first TV show you watched on Amazon Prime, its $99-a-year shipping and streaming service? Amazon probably does.
Amazon declined comment to Reuters on its report, and did not immediately return Quartz’s request for comment.
Season one of Amazon’s Top Gear offshoot, The Grand Tour, for example, cost $78 million to make and market, according to the documents seen by Reuters. It cost $49 per first stream, which suggests that nearly 1.6 million people watched it before they watched any other shows on Amazon Prime. That was more than any of the other Amazon originals detailed in the Reuters report, which reflected Prime subscribers in the US, the UK, Germany, Austria, and Japan. The first season of Man in the High Castle had the second largest number of first-time streams with about 1.15 million.
Amazon has said that Prime members who stream shows buy more products on the online shopping site. The company said in a statement last month that viewers of The Grand Tour spent 24% more in Amazon’s Sports & Outdoor store on average than Prime members who did not watch the motoring show.
The Reuters report showed that last year in the US, about 26 million Prime members had watched TV and movies on Amazon as of early 2017. That’s about one-third of the 75 million or more US subscribers analysts reportedly estimate Prime has in the US. Quartz has seen recent estimates that place the number of US Prime subscribers between 30 and 60 million, and as high as 90 million. Amazon does not report this number.
The Reuters report also said that Amazon’s top TV shows had drawn more than 5 million people worldwide to Prime by early 2017, based on the company’s accounting in the documents.
