Amazon Channels may be how one-third of cordcutters sign up for HBO

Amazon Prime Video Channels are the outside video subscriptions that Amazon brings together to sell like a marketplace. 

Joshua Goldman/Techhnews

How are cordcutters subscribing to HBO and Starz? People sign up with those networks’ apps directly, sure, but Amazon’s Prime Video Channels may be delivering a huge chunk of their members. 

Prime Video Channels are add-on video subscriptions — ranging from premium cable networks, such as HBO and Starz, to niche networks, like Yoga Anytime Channel — that Prime members can tack on to a subscription. The service makes Amazon the platform where you cobble together your own bundle of internet-delivered TV. 

In a note Friday, BMO analyst Daniel Salmon estimated that Channels may be responsible for big chunks of those channels’ total subscribers. 

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Nearly half of Starz direct-to-consumer subscribers may be coming from Amazon, the note said. Starz, which originally launched its standalone subscription on Channels before rolling out its own app a few months later, gets an estimated 47 percent of its subscribers from Amazon. 

HBO sources about 35 percent of its subscribers there, according to BMO estimates. Showtime? An estimated 37 percent. (Disclosure: Showtime is owned by CBS, the parent company of Techhnews.)

The scale of the Channels business hints at another way Amazon wants to insinuate itself as a consumer-friendly gateway to a big business. Amazon’s Maketplace has set up a system for letting third-party sellers ship their items through Amazon’s giant delivery infrasctructure, and its Alexa digital helper serves as a platform for outside parties to create voice-centered interactions. With each of these efforts, Amazon comes closer to being the storefront for all the stuff you need in your life. 

Amazon declined to comment. Starz, HBO and Showtime didn’t immediately respond to messages seeking comment. 

BMO estimated that Channels generated about $1.7 billion in revenue this year. That’s $1 billion more than the year before, by BMO estimates, and it is expected to increase to $2.6 billion in 2019 and $3.6 billion in 2020. Amazon, however, pays the an average of 70 percent of that money back to the programmers. This year, BMO estimated Amazon will pay about $1.2 billion to video product owners. 

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