When Jeffrey Tambor won the Golden Globe last night for his starring role in "Transparent," it was the first time Amazon.com received a thank-you shoutout from the stage of a marquee Hollywood award show. The online-retail giant, Tambor said, is his "new best friend." The feeling is surely mutual after "Transparent" took home the Golden Globe for best television comedy, in a victory that instantly afforded Amazon's Prime Instant Video platform newfound credibility as a venue for first-rate original programming. With the win for best TV comedy, in fact, Amazon surpassed Netflix in the race for streaming-video awards: "House of Cards" has so far won Golden Globes only for its stars, including last night's win by Kevin Spacey.
Will the exposure and fancy-dress accolades doled out by the Golden Globes help lure new Prime customers? There is evidence that the little statuettes can help. “Prestigious awards do aid in driving subscribers,” says Laura Martin, a media analyst for Needham & Co. “That’s what happened with Netflix, and we would expect that to happen with Amazon.” The chart below shows just how the award-winning effect coincided with gains in subscribers for Netflix, although it is difficult to say how many new customers signed up to watch "House of Cards" or "Orange is the New Black," which won lesser honors at last year's Primetime Emmys:
Ken Sena, a media analyst for Evercore, believes awards for original programming can be a boon for subscription services like Netflix and Amazon even if "it's kind of hard to quantify.” Subscribers may wait to sign up, he says, so it’s not always easy to connect the dots. Still, awards can improve the reputation of the broader service, which can lure subscribers over time.
Unlike Netflix, which covets streaming-video subscribers for their own sake, Amazon's $99-per-year Prime memberships are designed as a way to lure customers into a extensive relationship with the company. Here's how Bloomberg Businessweek's Brad Stone and Joshua Brustein explained the strategy last year, after Amazon raised the annual price by 25 percent:
Prime isn’t just a two-day shipping program anymore. It’s become a varied loyalty program that draws customers in and seeks to convert them into Amazon addicts. And that costs more. That said, Amazon Prime’s streaming media service isn’t priced at much of a premium compared with competitors. Prime’s monthly cost is now $8.25, not much more than the $7.99 that Netflix charges for a service that doesn’t also come with digital book rental and free shipping on a vast assortment of merchandise.
The Prime price increase is partly the result of changes in the way Amazon itself has used the service—as its prime weapon (pun intended) in the battle against Google and Apple. [Amazon CEO Jeff] Bezos believes, even more so than his rivals, that content (books, music, and the like) can be the gateway drug that lures customers into Amazon’s immersive world of devices and digital services. So over the last few years, he has packed digital freebies into Prime membership: 40,000 movies and TV episodes inside Prime Instant Video, plus more than 500,000 e-books that can be borrowed free, one each month, within the Kindle Owners’ Lending Library.
From that perspective, glamarous awards can help even if it doesn't translate into more Prime members. Martin says Amazon’s award has given it “a positive halo effect on all original programming they’re creating.” An award is “the best marketing you can buy because it’s free and it’s about quality.”
