Secondary Research Study for Client

Amazon Video

Mariana Camejo, Tori King, Trenton Firster, Amy Friedlander

 Situational Analysis

Brand Client Analysis

Amazon was founded in 1994 in the U.S. It does $107,006,000,000 in annual net

revenue. It employs approximately 230,800 people, so average sales per person is

$463,631 (Business Insider). Amazon Video was launched 2006 and has about 20

million subscribers to the Prime service (Yarow, 2014).

Amazon Video is an addition to the Prime service that Amazon offers. This

segment of Amazon is a part of the video streaming industry; this is a relatively new

category that has been growing for many years. This industry is mostly dominated by

Hulu, Netflix, Amazon Video, and YouTube. The number of services that are providing

these services are only growing as the industry matures. Additionally, content that is

exclusive and personalized is in demand, as the category begins to clutter (Anderson,

2016).

One of the most important trends is that the industry is beginning to overtake

traditional media, at least in the minds of the consumers. Many subscribers to video

streaming services simply do not use cable, whether it be because of cost,

convenience, or lack of commercials (Anderson, 2016). Additionally, the trend rides on

the youngest two generations, Generation Z and millennials. This means that as time

progresses - barring any unforeseen circumstances - the industry will only further

solidify their foothold (Barr).

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 Recently, Amazon Prime Video has been expanding into new regions. Last year,

it expanded into 200 new countries and territories. 2016 also saw a 22% increase in

sales for Amazon as views for their video service doubled (Tribbey, 2017). Global

demand for streaming content clearly has risen, as Amazon’s sales and profit reflect the

new growth. Additionally, Amazon launched Amazon.in, an India service that will feature

its own exclusive series, catering to their new market (Tribbey, 2017).

Competitive Analysis

Amazon Video is an online streaming site where users can access an array of

television shows and movies. One of its biggest threats is the fact that this market is

very crowded and as a result, there are many strong competitors. Some of Amazon

Video’s biggest competitors include Netflix Inc., Hulu, and Youtube. Netflix is a global

organization that provides access to television shows, including originals, movies and

documentaries through a subscription process. Members of Netflix pay anywhere from

eight to twelve dollars a month, which enables them to have unlimited access to all

content on Netflix through either a TV, computer, ipad/tablet or smartphone (Netflix Inc.,

2010). According to Business Insights, Netflix added a streaming service in 2007, which

has made it a more versatile company in terms of the amount of content it provides and

its streaming capabilities include domestic streaming, domestic DVD, and international

streaming as well (Netflix Inc., 2010).

Netflix has dominated the area of online streaming, which is evident through the

amount of its subscribers and its total revenue intake. In 2011, Netflix had a total of

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21,450,000 subscribers and in a matter of five years Netflix was up to 49,430,000

subscribers in 2016, which is a one-hundred and thirty percent increase (Netflix, n.d.).

Statista did a report on the “leading reasons why Netflix subscribers in the United States

subscribed to Netflix as of 2015”, and the results showed that some of the top reasons

were not solely specific to Netflix (eMarketer, n.d.). For example, the leading reason that

people bought a membership to Netflix, which scored eighty-two percent, was because

of the convenience factor of on-demand streaming programming (eMarketer, n.d.). This

statistic is very interesting because Amazon Video, Hulu, Youtube, and all other similar

companies in the industry all have that same convenience factor, which could be a

benefit to Amazon because there’s definitely room for growth due to people’s

satisfaction with that feature. However, twenty-three percent said that the main reason

they signed up for Netflix was because of ‘original programming’ (eMarketer, n.d.).

Clearly, this is one of Netflix’s strongest unique selling points because its exclusive

original shows and documentaries/movies are extremely popular. Additionally, as of the

fiscal year of 2016, Netflix had a total revenue amounting to $8,830,670,000; whereas in

2001, Netflix’s total revenue was $75,910,000 (source 1).

Netflix attributes it success to two different categories including its ability to

attract new subscribers and to have a strong retention rate of pre-existing members. A

Forrester survey collected information and data pertaining to Netflix’s customer

satisfaction in comparison to its top competitors such as Amazon Prime Video, Hulu and

HBO Now. Results found that Netflix rated the highest in the categories: “easy to watch

on a TV’ ranking at 72 percent, ‘interesting original content’ at 60 percent, ‘easy access

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on all devices’ at 60 percent, and ‘reliable service’ at 58 percent” (Netflix leads, 2017).

Amazon Prime trailed Netflix in this survey by at least ten percentage points in each

category, coming in second in front of Hulu and HBO Now (Netflix leads, 2017).

Another interesting business model that Netflix engages in is the customizable

experience. Maze explains this ‘Netflix effect’ by comparing it to the restaurant industry

by explaining, “Restaurants use technology to tailor the customer experience. Want a

look at the restaurant of the future? Try Netflix. Companies like Netflix and Amazon

have thrived based on their ability to personalize the customer experience. They know

where you come from and what you order. And they often know where you go when

you’re done” (Maze, 2017). Netflix uses metrics to figure out what it customers viewing

patterns are, and suggests similar programs based on a specific user’s past history.

Amazon targets its customers through their shopping patterns, but if the customer only

buys clothing and not movies or shows on Prime Video, the advertisements will most

likely not be targeted to that part of the company. Maze attributes this technology that

Netflix uses to target its members to be a main reason why the store Blockbuster went

out of business in 2011 (Maze, 2017).

Hulu is in the same industry as Amazon Prime Video; however, Hulu has been

around for a few more years. Hulu started up in 2007, while Amazon Video started

recently, in 2011. Hulu offers the same services as Amazon Video; however, you can

access Hulu from any digital device such as: Wii, smartphone, tablets, laptops, etc.

Although Hulu provides the same services as Amazon Video, it is still a top competitor

in the Video Streaming Industry. According to ​2016-2016 ​survey​, o​verall in the U.S.

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Hulu is the third most watched streaming site next to Netflix in first, and Amazon Prime

Video in second (nScreenMedia). Although, when just looking at millennials preferences

and subscriptions Hulu was even lower. Hulu was at number 6, while Netflix dominated

followed by live television at number 2, recorded through DVR services at number 3,

YouTube, then Amazon Video at number 5 .

Even though Hulu is not the top provider, they’re still a large and wealthy

company that continues to grow. In 2015 the company made about $1 billion in sales

(Business Insights: Essentials),​ and had a continuous rise in subscribers. In just 2015 to

2016, subscribers increased from 9 million to 12 million (Hulu, & The Verge).

Hulu is keeping up with its top competitors with new trends and improvements to

its online video streaming site. An example of this is its brand new agreement with the

corporation CBS. This means Hulu will be​ providing a service its competitors have yet to

offer: the ability to stream live episodes of shows of a major broadcasting network. T​hey

rewarded some members by inviting them to beta test the upcoming service (Hulu

Press). Another thing that Hulu did to keep up with competitors was to make their own

content, and start some of their own original series. Some of the big ones such as “The

Mindy Project”, “Moone Boy”, and “The Handmaid’s Tale” were largely promoted on

major network broadcasting channels. The most recently advertised series “The

Handmaid’s Tale” was even put in for a 30 second Super Bowl commercial ad costing

around $5 million, with 111.3 million eyes watching ​(Schwindt)​. Hulu has kept

expanding its streaming services by making intelligent merges, agreements, and

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partnerships with companies such as The Walt Disney Company, 21st Century Fox,

Comcast, and Time Warner, and so many more major companies (Hulu Press).

C​onsidering what is stated above, I believe this says a lot about the streaming

industry. It takes a lot to be the top provider in a sea of services, and stay in that top

spot. It’​s a very fast paced industry and a company could easily be left behind if it’s not

paying close attention to the trends within the market, while still being attentive to

consumers and subscribers needs/wants. Having expansive content from other

providers is importan​t, but having content made and owned ​by your company is

essential to making your company stand out, remain unique, and remain on top.

In recent years, YouTube has pushed itself to become one of Amazon Video’s

top competitors. Fourteen percent of North America’s downstream traffic goes through

YouTube, while Amazon Video only get’s 2.6% (Richter, F. 2014, November 24). While

still in the same category of video as Amazon, Youtube varies quite a bit from just

streaming. Users - both individuals and companies - are able to not only just view

content but also create and share their own videos through YouTube allowing it to be

more interactive (YouTube, LLC. 2016).

Originally, YouTube started off with the simple intent of allowing people to post

and share videos as they pleased. However, as the company grew, it had to shift its

focus to bigger ideas. After Google bought the company in 2006, it expanded greatly

(YouTube, LLC. 2016). In 2008, it joined with multiple different Hollywood Studios in

order to start showcasing TV shows and movies on its website and mobile app

(YouTube, LLC. 2016). By 2011, YouTube had even acquired its own video production

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studio, deemed Next New Networks (YouTube, LLC. 2016). This allowed YouTube to

create its own content instead of having to rely on other studios. After this occurred,

YouTube became a threat to Amazon Video. Once it began creating it’s own content

and allowing users to access it, YouTube was suddenly a strong competitor in the field

of video streaming. Especially because at this point in time, watching these videos was

free, with the exception of ads.

In 2014, YouTube announced that it would be expanding even further to include

a subscription service. This service was implemented in 2016 and currently costs $9.99

a month (YouTube, LLC. 2016). What comes with it is ad free streaming, the ability to

view content offline, and also exclusive original video series that includes well known

YouTubers which appeals to many (YouTube, LLC. 2016).

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 SWOT ANALYSIS
Strengths
● Amazon has strong brand awareness
● Large returning customer base for rest
of site
● Strong financial support from Amazon,
Inc.
● Amazon Video comes from Prime,
which has more incentives than just
the video service
● Growing international consumer base
Opportunities
● Growing industry- increasing
customer base
● Main target audience (millennials) are
increasing their purchasing power as
they find jobs and careers
● Traditional media is expensive relative
to Prime
● Overall trend towards personalized,
immediate media, especially in target
market
● Expansion overseas is highly
demanded, something that Amazon
had already started
Weaknesses
● Low comprehension of Amazon’s
video streaming service
● Segmented business model causes
fragmented customers
● It only comes at with Prime, so there
is a high
Threats
● Netflix
○ Low, competitive prices
○ Dominates the industry
○ Very high ratings for original
content
● HULU
○ Several partnerships with big
name companies causing
them to have a lot of content
○ Providing live television
broadcast soon
○ Publicly advertises shows
outside of own website,
including major networks
○ The company has been
established for longer
● YouTube
○ Ad free video streaming
○ Offline content viewing
○ Users can post their own
content
● Growing industry leading to more and
more competitors
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 Conclusion

Based on the research conducted, we’ve decided that Amazon Video’s core

challenge is its service awareness. This means that while Amazon is a very

recognizable and known brand, there is no major understanding of the services

provided by Amazon Video. Amazon Video is an added service that comes with the

subscription to Amazon Prime. Therefore, since people are not directly purchasing

Amazon Video, subscribers to Amazon Prime often ignore the video aspect of their

subscription. Therefore, there is low service awareness of the streaming service, which

limits customer growth.

There are some gaps within our research that we feel are necessary to complete

our situational analysis. Specifically, we want to know people’s level of awareness and

knowledge about just Amazon Prime Video, not Amazon Prime in general. Additionally,

it would be important to know how many Prime users actively watch content on Amazon

Video. Also, we want to know why some Amazon subscribers pay for Prime, but never

take advantage of Video, which automatically comes with the membership. Another

area of primary research that we want to investigate is how many Prime members are

subscribed to other streaming platforms, such as Netflix, Hulu, and Youtube. And vise

versa, those who aren’t subscribed to or watch Amazon Prime Video, why do they

watch and pay for other mediums. Some recommendations that we would provide our

client with would be to individually provide packages, and not clump all of the services

under the Prime subscription. Through incentives, such as having a bundle service,

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which would lower the prices of each service individually, it would spark an interest and

entice new prospective customers in the video category.

In terms of level of awareness and knowledge of Prime, an in depth interview

would be the most apt method because it would allow for insightful explanation. To

figure out how many prime users actively use Video, a survey would be sufficient. In

order to see why members of prime don’t take advantage of Video, we believe that an

interview would be necessary in order to have people elaborate on their reasoning for

their preferences. Lastly, a focus group would be the best way to compare other

streaming services to Prime to gain insight on why people prefer one over another.

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 Reference List
Anderson, Sarah. (2016, October 1). ​Cutting the cable​. Retrieved from
http://www.lexisnexis.com.ezproxy.ithaca.edu:2048/lnacui2api/api/version1/getD
ocCui?lni=5KV5-MB61-JBRG-X18P&csi=270944,270077,11059,8411&hl=t&hv=t
&hnsd=f&hns=t&hgn=t&oc=00240&perma=true
Barr, J. (n.d.). ​Streaming Media Market Trends​. Retrieved February 13, 2017, from
http://www.faulkner.com/freereport/streamingmedia.htm#Market_Trends
Business Insights. ​Amazon.com Inc.​ Retrieved from
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du:2048/essentials/company/360812
Business Insights: Essentials. (n.d) Hulu L.L.C. In ​Gale Business Insights: Essentials.
Retrieved Feb 9, 2017, from
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eMarketer, & Cowen Group. (n.d.). ​Leading reasons why Netflix subscribers in the
United States subscribed to Netflix as of January 2015​. In Statista - The Statistics
Portal. Retrieved February 12, 2017, from
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-netflix-usa/
Hulu, & The Verge. (n.d.). Number of Hulu's paying subscribers from 4th quarter 2010 to
2nd quarter 2016 (in millions). In ​Statista - The Statistics Portal​. Retrieved
February 10, 2017, from
https://www-statista-com.ezproxy.ithaca.edu/statistics/258014/number-of-hulus-p
aying-subscribers/​.
Hulu press. Retrieved February 9, 2017, from https://www.hulu.com/press/about
Netflix, Inc. (2010). In D. Jacques & P. Kepos (Eds.), ​International Directory of
Company Histories​ (Vol. 115). Detroit: St. James Press. Retrieved from
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4121/2a2769fa80b629a5b7d73edd0955026b?u=nysl_sc_ithaca
"Netflix Leads The Content Crowd In Streamer Satisfaction." Benzinga.com 2 Feb.
2017. Business Insights: Essentials. Web. 12 Feb. 2017.
Netflix. (n.d.). Number of Netflix streaming subscribers in the United States from 3rd
quarter 2011 to 4th quarter 2016 (in millions). In Statista - The Statistics Portal.
Retrieved February 12, 2017, from
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of-netflix-streaming-subscribers-in-the-us/​.
nScreenMedia. (n.d.). Do you use any of these monthly subscription services for movies
or TV shows?. In ​Statista - The Statistics Portal​. Retrieved February 11, 2017,

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 from
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t-popular-digital-video-subscription-services/.
MAZE, J. (2017). The Netflix effect. Nation's Restaurant News, 51(2), 12-16.
Richter, F. (2014, November 24). Netflix and YouTube Are America's Biggest Traffic
Hogs. Retrieved February 12, 2017, from
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Schwindt, O. (2017, February 3). “The Handmaid’s tale” earns Hulu’s First super bowl
spot for an original series (watch). Retrieved February 14, 2017, from Variety,
http://variety.com/2017/tv/news/the-handmaids-tale-super-bowl-ad-hulu-1201977
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Tribbey, C.(n.d.). Amazon: Prime Video Views Double. Retrieved February 13, 2017,
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01320745/ee23b871ca79c298981bc690afe9cbbf?u=nysl_sc_ithaca

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 Agency Profile

Team Biographies

Amy Friedlander​ is a sophomore attending the Roy H. Park School of

Communications, pursuing a Bachelor of Science degree in Integrated Marketing

Communications and a Legal Studies minor. She is passionate about the environment,

politics, media, and fashion. She hopes to pursue a career that will combine these

interests and create social justice through advertising, PR, social media, and new

technologies. Amy participates in organizations on campus including PRSSA and Club

Tennis. She is on the blog team for PRSSA and is also volunteering through make a

wish foundation for the Swish for a Wish event in the Spring. Amy is organized,

motivated, and creative. In her free time she loves to travel, spend time with her family,

and participate in volunteer work in her hometown in Westchester, New York.

Victoria King​ is a sophomore Integrated Marketing Communications major with a minor

in Still Photography at Ithaca College. She participates in various activities and clubs

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across campus. She is the head of the photography team for Hi Fashion studios and a

member of PRSSA. Victoria is aiming to gain experience in media, marketing and

advertising and has professional experience working as an intern in the research

department of Capital Cardiology Associates where she was able to organize and plan

patient studies for new medicines. Victoria hopes to someday work in a field that lets

her combine public relations or advertising with international relations and also allows

her to travel.

Mariana Camejo​ is a sophomore Integrated Marketing Communications Major with a

minor in International Business at Ithaca College. She was originally born in Caracas,

Venezuela, but has lived the majority of her life in the U.S. in several states including:

Texas, Colorado, Indiana and New York. However, Mariana currently resides in the

Adirondacks in Queensbury, New York. She is passionate on traveling, film

photography, and singing. Mariana participates in several organizations and clubs on

campus. She is part of the national student organization: PRSSA and is part of the blog

and social media team within it. She also plays on the Ithaca College Club Tennis

Team, and enjoys singing/ performing in the group called Routine Disturbances. She is

also a manager for Campus Center and Event Services. Mariana hopes to travel and

study abroad in the following year in Barcelona, and have a successful career at an

international level.

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Trenton Firster​ is a sophomore Integrated Marketing Communications Major at Ithaca

College. He is from Honeoye Falls, a small village just south of Rochester, NY. He is a

passionate musician who plays jazz piano. He is also invested in politics, and has taken

many political classes to learn more about the structures of governing bodies. He hopes

to work in a PR organization after his time at Ithaca.

Mission Statement

Everest & Co. was founded with the intent to provide information and insight for

all of our clients. Our goal is to guide our clients through the oversaturated landscape

that surrounds the world of business. We aim to help companies realize their full

potential and all of their opportunities for growth through our research. Everest & Co.

strives to provide accurate information that is tailored to facilitate improvements within

the company. Our philosophy is that you can’t climb a mountain without the right tools.

Our purpose is to equip you with the correct material to better target your market and

rise within your industry. Hence our name Everest & Co.

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 Team Promises

Team Promises A B C D F

1. Have assigned individual work done before

group meeting times, and notify all group
members 48 hours before the group meeting
if there will be a conflict with meeting that
goal.

2. Respond to group message chats when

information is relevant to you, within a timely
manner and within 24 hours.

3. Always be an engaged and constructive

group member, meaning that you will be
ready to: participate, have a positive attitude,
and work efficiently.

4. Make sure that all criticism given is

constructive and keep an open mind to all
criticism, meaning that if someone has
suggestions to add to your work, be willing to
hear their opinions.

5. Make sure that workloads are fair and

balanced and that one person doesn’t
dominate over the rest of the group.

6. Make sure that everyone is carrying their

equal weight and proofreading their own work
before submitting it to the other group
members.

7. Must show up to all meetings, be

accommodating to everyone’s schedules, and
give 24 hours notice before a meeting if you
cannot attend.

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Signatures

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