Amazon Prime subscribers in Spain have gained access to the US Amazon Prime Instant Video platform. The move occurred immediately after HBO Espana launch, November 2016, and is understood to serve as a sneak peek at the company’s Instant Video service for current premium Amazon Prime subscribers in Spain.
Amazon has previously stated that they expect to initiate the global launch of Prime Video in December 2016, though the company is yet to release exact launch dates.
The online subscription video market in Spain is dominated by Telefonica’s multiscreen proposition Movistar Go, free to all Movistar Plus subscribers. To date standalone paid-for subscription services, such as Netflix and Wuaki TV, have been less successful in the territory with Free-to-Air (FTA) services typified by local broadcasters, RTVE, Mediaset Espana and Atresmedia continuing to dominate consumers’ viewing habits. These FTA services offer compelling ad-funded catch-up propositions with popular long-form content, much of which is available in perpetuity. Mediaset Espana reported over 220m online video streams in Q3 2016 alone.
The lower propensity to pay for TV and video services in Spain remains an obstacle for services like Netflix and newly launched HBO. This should prove less of a problem for Amazon, compared to other paid-for services, as Prime video will benefit from its bundling with the Amazon online retail offer and the single payment system that this includes. Prime subscribers get a combination of benefits, including video, music, e-books, e-gaming, photo storage, priority shipping and priory access to deals. This perceived value was behind Amazon’s success in Germany; the other market notoriously challenging in terms of encouraging consumers to pay for content. German Prime proposition has been particularly attractively priced for the first three years from launch (February 2014) - €49 ($52) a year, compared to £79 ($100) in the UK and $99 a year in the US. Amazon is to increase Prime price in Germany to €69 ($74) effective from February 2017.
Currently, Amazon’s Spanish subscribers pay an annual fee of €19.95 ($21), which includes premium shipment, Prime Twitch, and photo storage. The rate is expected to increase once Prime Video officially is launched and included within a Prime subscription.
In terms of content, a lot of premium Spanish TV rights are already secured by Telefonica for the Movistar Plus platform and for the free to use multiscreen offer Movistar Go. Importantly for the Spanish market, sports content rights are split between Telefonica, Mediapro, and local broadcasters, and despite rumours earlier this year, Amazon is not in the position to launch compelling sports content on the instant video platform globally. Therefore, like to Netflix, Amazon will be banking on its original programming - that will include its most recent and reportedly successful show The Grand Tour - to differentiate the service.
Following the success of the strategy in Germany, Amazon will seek to repeat the lower annual pricing for Prime in Spain, and will attract further subscribers with the perceived value of the Prime offer. However, retaining such subscribers will increasingly depend on the quality of local and localised video content enabling the service to compete readily with Spain’s FTV and illegal services.