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This is How Amazon Evaluates the Success of Amazon Prime Originals
By: Fortune | March 16, 2018

No one outside of Amazon can say for sure how many people have Prime memberships, but new information from the Seattle retail giant gives a hint about how the company gauges the success of its original content.

Amazon measures “cost per first stream,” which divides the total cost of producing and marketing an original show by the number of people who stream it after first signing up for Prime.

For example, the $78 million spent on The Grand Tour, Amazon’s Top Gear spinoff, broke down to $49 per first stream. This means around 1.6 million people watched this series after becoming Prime members — more than any other Amazon original, according to documents reviewed by Reuters.

Good Girls Revolt, which was not renewed by Amazon for a second season, had a first stream cost of more than $1,500, according to company documents.

While Amazon is secretive about its streaming statistics, the company is transparent that creating high quality original video programming is a strategy for converting that audience into shoppers.

“When we win a Golden Globe, it helps us sell more shoes,” founder and CEO Jeff Bezos said at a 2016 technology conference near Los Angeles.

And it seems to be working. The documents shared with Reuters showed that about one in four Prime signups was driven by Prime Originals, like Man in the High Castle and Transparent, between late 2014 and early 2017.

Bezos also said the streaming audience is more engaged than those not watching film and TV on the platform, renewing their subscriptions and converting from free trials at higher rates than members who don’t use Prime for watching videos.

The U.S. audience for all of Amazon’s video offerings, including shows and movies licensed from other companies, was about 26 million customers, according to documents reviewed by Reuters.

Amazon is investing heavily in video programming. Reuters reported that the company spent $5 billion for original and licensed films and TV shows last year, making it one of the company’s most significant expenses.

http://fortune.com/2018/03/16/amazon-prime-video-prime-originals/

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