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Amazon’s Prime Video Direct Is Cutting Royalty Fees for Low-Engagement Content

Amazon is rejiggering the payment structure for its Prime Video Direct self-publishing program to reward the highest-performing content with higher rates — while reducing royalty rates for less-popular titles.

Starting April 1, 2019, the standard license fee for all titles made available through Amazon’s Prime Video Direct for Prime subscription access in the U.S. will be paid according to a new mechanism. Those rates will range between 4 and 10 cents per hour streamed in the U.S. on Prime Video, based on a calculation of the relative “customer engagement ranking” score for each TV show or movie, according to a notice on Amazon’s site for PVD users.

So what does Amazon’s “customer engagement ranking” mean? It’s not totally clear, except that what the company dubs “CER” will be calculated on a per-month basis, representing a percentile ranking of a title’s level of engagement with Prime customers in relation to other titles published via Prime Video Direct.

In an article on its site, Amazon says CER takes into consideration multiple data points which can include: number of unique Prime customers (current and new) who view the title; time each customer spends watching a title; popularity of a title based on “notable talent,” “an IMDb presence and rating” and box-office performance; and overall quality (e.g., whether a title has compelling and high-quality poster art, accurate metadata, localized subtitles).

Under its existing royalty-payment structure, Amazon has paid Prime Video Direct content partners opting for Prime Video distribution a base rate of 6 cents per hour for up to 99,999 hours streamed in a 365-day window. That steps up to 10 cents for 100,000–499,999 hours; 15 cents for 500,000–999,999; then back down to 6 cents/hour streaming for titles delivering over 1 million hours over a one-year period.

Why the change? The ecommerce giant’s new royalty structure for Prime Video Direct is aimed at rewarding content providers that publish compelling content. Amazon is encouraging content owners who participate in the program to build their own brand and publicize their titles to boost their engagement scores, listing best practices for doing that in the help section for the Prime Video Direct.

An Amazon rep confirmed the changes to the Prime Video Direct program and referred to the site’s FAQs for more info.

Companies that have participated in Amazon’s PVD include FilmRise, Endemol Shine Group, Samuel Goldwyn Films, Funny Or Die, Indie Rights, and the Young Turks. Amazon also has brought dozens of films from festivals to Prime Video through PVD, via its Film Festival Stars program (which also has included one-time cash bonuses to filmmakers and content owners).

Initially, when Amazon first launched the program in 2016, it offered content suppliers flat-rate royalties of 15 cents per hour of video streamed in the U.S. (and 6 cents in other territories) for content in Prime Video.

What’s not changing: PVD content providers that opt to make their titles available for rent of purchase on Amazon will receive 50% of net revenue. In addition, Amazon’s standard offer for PRV participants who want to sell subscriptions on Amazon Channels is a 50% revenue share (although the company negotiates more favorable splits with larger media companies).

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