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Amazon’s Roy Price on Launching Global Competitor to Netflix

Amazon has officially fired the starting gun on its worldwide race against Netflix to capture subscription-video viewers — and its global Prime Video service is priced well under Netflix.

However, how extensive the content buffet will be available to Prime Video subs spanning Afghanistan to Zimbabwe isn’t completely clear. As with Netflix, the tip of the spear for Amazon’s global foray are its originals, including pricey auto show “The Grand Tour,” as well as shows like “Transparent” starring Jeffrey Tambor, alternate-history thriller “The Man in the High Castle” and drama “Mozart in the Jungle.”

Roy Price, VP of Amazon Studios and global head of Prime Video content, said that for about the past year the company has been structuring deals to secure global rights to licensed content. “We’ll still look at a deal that is checkerboard, but we’ve shifted focus primarily to global [licensing] deals,” he said in an interview with Variety. Netflix has been acquiring content for global distribution for several years.

Price acknowledged that Amazon is moving to compete directly with Netflix around the globe. But he said there are a number of competitors Prime Video will be vying against. “In any given country there are multiple entities in the on-demand space,” he said. “I think there’s no question that it’s catching on.”

Just comparing content budgets, Amazon will have a less robust selection than Netflix. This year, Amazon will spend more than $3 billion on Prime Video content — compared with $6 billion by Netflix, according to estimates by Cowen & Co. analyst John Blackledge. Amazon has said video-content spending in the second half of 2016 would double from the year-earlier period but hasn’t provided specific dollar figures.

In addition to Amazon Studios’ originals, the Prime Video international lineup will include “hundreds” of movies and TV shows, the company said, although it said availability may vary by country. Movies titles licensed worldwide for Prime Video include “Jurassic Park,” “Pulp Fiction,” “Inglorious Bastards,” “The Mummy,” “Gone Girl,” “The Internship,” “Noah” and “Runner, Runner.”

TV shows include “Fear The Walking Dead,” “Mr. Robot,” “Preacher,” “Into the Badlands,” “Flesh and Bone,” “The Path,” “Hap and Leonard,” “Startup,” “Community,” “Justified,” “The Tudors,” “The Shield” and “Dawson’s Creek.”

It’s worth noting that not all Amazon Studios originals are available at launch. In 2017, Prime Video globally will add other original series including Woody Allen’s “Crisis in Six Scenes,” David E. Kelley’s “Goliath” starring Billy Bob Thornton, docuseries “American Playboy: The Hugh Hefner Story,” and “Sneaky Pete” from Bryan Cranston and Graham Yost, and starring Giovanni Ribisi.

Prior to its worldwide launch, Prime Video was available in the U.S., U.K., Germany, Austria and Japan. Its biggest challenge in going to 200-plus countries, according to Price: “You can have a global service, but there are no global customers — there are only local customers. You have to win the day for each customer in each country, in Dakar and Istanbul — everywhere. It takes some thought and some localization.”

For specific geographies, Amazon has licensed or is producing a number of Bollywood titles in India, anime, Korean dramas and other genres. “We already have a robust production pipeline in Japan and India, where we have independent development teams,” Price said. “We’ll grow [content] over time based on what people respond to.”

Price wouldn’t say how much Amazon is paying for “Grand Tour,” from the Jeremy Clarkson, Richard Hammond and James May, the former hosts of BBC’s “Top Gear.” The price tag has become an industry guessing game with estimates ranging from $160 million to $250 million. “I would say it was expensive, but well worth it,” he said. “That is a show that has a strong global following, and we’d love to have more like that.”

Amazon Prime Video, available now virtually everywhere in the world, carries a promotional price of $2.99 (or €2.99) per month. China is the notable exception, and Netflix recently abandoned plans to enter the Middle Kingdom citing a “challenging” regulatory environment. After the six-month promotional pricing expires, Prime Video will increase to $5.99 (or €2.99) monthly, which Price called “a sustainable price.” That’s still less than Netflix’s service ranges between $8.50 and $12.70 per month.

Given Amazon’s lower price point than Netflix in many countries, “it’s immediately a bona fide alternative,” VideoNuze’s Will Richmond wrote in a blog post. At the same time, he added, Amazon Prime Video will raise awareness for Netflix, too — and some consumers will subscribe to both services.

Other analysts believe both Amazon Prime Video and Netflix can successfully co-exist. “We believe there is room for multiple global OTT digital video providers, with Netflix being the first mover, the global leader and the innovator,” Blackledge wrote in a research note. “Amazon is making the necessary investments in Prime Video content (and Prime Music to a lesser degree) to launch Prime Video on a global basis” excluding China.

The worldwide launch of Amazon Prime Video will bring it to many countries where Amazon.com doesn’t current operate. Today, it has retail operations covering the U.S., the U.K. and Ireland, France, Canada, Germany, Italy, Spain, the Netherlands, Australia, Brazil, Japan, China, India and Mexico. “We’ll be ahead of retail in some of these countries,” Price said. “In a lot of places, it’s easier to put a server in a country than a warehouse.”

At launch, Amazon Prime Video programming will be available in only a few languages. In addition to English, the service will offer French, Italian, Portuguese and Spanish subtitled and dubbed versions for many titles. “It’s a major effort to subtitle and/or dub for the world,” said Price. “We’ve been organizing around that. It’s definitely one of the issues.” By comparison, a Netflix rep says it provides user interface support, subtitles and dubs in 20 languages “and we keep adding more.”

As in the initial Prime Video markets, the global service is available the Amazon Prime Video app on Android and iOS phones and tablets, Amazon Fire Tablets, select LG and Samsung connected TVs and on the web at primevideo.com. Meanwhile, Amazon’s Fire TV set-top is currently available in the U.S., U.K., Germany, and Japan, so Prime Video is available on Fire TV only in those territories.

Given that internet infrastructure is spotty or slow in some parts of the world, Prime Video members also can download all movies and TV shows on the service for offline viewing, a feature that Netflix recently launched for a subset of its content. Amazon also is letting Prime Video members control how much data they use when streaming and downloading video, offering “good,” “better” and “best” quality controls.

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