Amazon.com’s Prime Video Channels business, which allows customers to subscribe to third-party video streaming services, will generate $1.7 billion in revenue this year, up from $700 million in 2017, according to a BMO Capital Markets report cited by The Hollywood Reporter.
What’s unclear from the report is whether that’s a gross number, before Amazon pays the entertainment companies that own the streaming services their share of the subscription fee, or a net number. As we have reported, Amazon keeps at least 30% of the subscription fee for Amazon Channels, although it has been looking to raise that share.
Amazon made an interesting decision a few years ago when it decided to go a la carte with its streaming services offering, rather than launch a skinny bundle of channels like YouTube has. So far that decision has proven wise as many skinny bundles are losing money. The channels offering, on the other hand, should in theory be a high margin business.