Another headache for Sky as Amazon launches Prime in New Zealand

Yet more streaming video competition – but at least it should ease merger approval.

So much for talk of a shakeout in the streaming video market. It's just got more crowded.

New Zealand has already seen Quickflix come back from the dead under its new American owner.

Now Amazon is launching its Prime service into New Zealand as part of a 200-country expansion announced overnight. Kiwis can access the service from today.

Prime costs $US2.99 a month for all the streaming video you can eat (after a six-month introductory period, the price doubles to $US5.99 or $NZ7.86).

Like other streaming services like Netflix and Hulu, Amazon Prime is increasingly creating its own content. Amazon paid megabucks to lure Top Gear trio Jeremy Clarkson, James May and Richard Hammond. Their new series, The Grand Tour, has become Prime’s signature show (it's had mixed reviews).

Amazon's official guff says "Prime members can expect all-new seasons of many critically acclaimed shows like The Man in the High CastleMozart in the JungleHand of GodRed Oaks and more, plus full first seasons of The Grand Tour, Woody Allen’s Crisis in Six Scenes, David E. Kelley’s Goliath featuring Billy Bob Thornton, docuseries American Playboy: The Hugh Hefner StorySneaky Pete produced by Bryan Cranston and Graham Yost, Z: The Beginning of Everything starring Christina Ricci, Patriot and The Tick, among other Hollywood movies and TV shows coming soon."

And as with Netflix, not all content available to US subscribers will be available to New Zealand subscribers (although Fire TV can be gamed; many in the tech set have been accessing the US version of Prime for some time — remembering that Commerce Minister Paul Goldsmith has said no one will be prosecuted for accessing a geo-blocked offshore service. Fingers-crossed, you survive the reshuffle, Paul).

Good news, bad news for Sky
On one level, Prime’s arrival is another headache for Sky TV, whose shares fell 11% yesterday on another profit warning and were down another 4.21% by market close today.

But ironically, it should also help underline the crowded, ferociously competitive nature of the new world of over-the-top media, which could make the Commerce Commission more likely to green-light its merger with Vodafone (the regulator recently delayed its deadline, again. A decision is now due on February 23.

Mutual suicide pact
At this point, it’s not clear how anyone’s going to make money from streaming video on demand – leading Sky TV chief executive John Fellet to quip to NBR that the market resembles a mutual suicide pact.

Quarter after quarter, Netflix – for all its billions in revenue from streaming – only squeaks into the black by dint of its legacy DVD rental business in the US.

For now, streaming video seems positioned mostly as a loss-leader. Telcos around the world are using on-demand video as a way to attract or upsell customers to better broadband packages while Amazon can use Prime to cross-promote its online retail.

And the local market just got tougher.

Prime can be accessed through Amazon’s Fire TV (a $US89.99 gadget similar to Apple TV for getting broadband-delivered content piped to your regular television), through various brands of smart TV or via Apple and Android apps. As well as Amazon's own content, Fire TV features apps for other services like Netflix and Hulu. Annoyingly, while Prime has launched in NZ, Amazon is not shipping Fire TV or its cheaper companion the Fire Stick to NZ addresses, an Amazon spokeswoman tells NBR.


Amazon Prime: Owned by Amazon, the giant internet retailer. There are 69 million Prime subscribers, though it's not clear how many are joined for the video (in the US, being a Prime member also includes other perks such as discounted delivery).  Huge global expansion announced today. $3 a month for first six months then $US6. Only a seven-day trial compared to the 30 days offered by rivals. 

Fanpass: Owned by Sky. Gives non-Sky TV subscribers access to Sky Sports channels 1-4 on a day ($15), week ($20) or month ($56) pass. Also used for pay-per view events like the recent Parker-Ruiz fight. Recently added an Apple TV app.

HBO Now: Owned by Time Warner. An intriguing development, the HBO NOW app, cuts out middle-men old (pay TV networks) and new (like Netflix) to deliver HBO shows directly to consumers. Geo-blocked to New Zealanders, and on launch it made quite an aggressive effort to weed out non-US subscribers (members had to prove they resided in the US or got kicked off). Available as an app through Apple TV and Amazon Fire TV, among other avenues. $US15 a month. 

Hulu: Cooperative owned by Disney-ABC, NBC Universal, Fox and Time Warner. Where Netflix features its own shows and back-catalogue content, Hulu has an emphasis on shows screening now in the US on the major networks – although it is increasingly adding original series too. $US8 a month with ads, $US12 a month without ads. Available as an Apple TV app.

Lightbox: Owned by Spark. Free to Spark broadband customers, $12.99 a month for others. Good selection of TV series but no movies. Its sister service, Lightbox Sport, was axed earlier this year.

Piracy: Still a popular option, with scoff-laws egged on by the fact there have been no video file-sharing prosecutions brought in New Zealand.

Netflix: Easily the biggest streaming service on the planet with 88 million subscribers and enjoys a big lead in the local market over second-placed Lightbox and distant-third Neon. Over the past year, it has dramatically pruned back its catalogue of content in favour of an emphasis on Netflix-original series — on which it will spend a staggering $US6 billion next year, easily more than NBC, the biggest-spending traditional TV network. This year has become increasingly aggressive and effective at blocking outsiders from its US-based service, which still offers content than versions of the service offered elsewhere. From $11.49 to $18.49 a month depending on the number of screens and options like HD and ultra HD (4K). 

Neon: Owned by Sky TV. Heavy on content from HBO such as Game of Thrones and Westworld. Finally added HD recently. Apple TV app on the way. $20 a month.

Sky On Demand: Sky's new feature, which has added on-demand content that its subscribers can access through their decoder via a wifi dongle.

YouTube Red: Owned by Google. Soft-launched earlier this year in the US, Australia and New Zealand. Lets subscribers watch ad-free YouTube clips and stream TV shows and movies for $13 a month. One to keep an eye on. Just today, Facebook's Mark Zuckerberg made noises about his social network launching a similar service. So make that two sleeping giants.

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