There is a new service in the jungle of streaming offers. Amazon is behind it and takes a look at Germany’s advertising market. Will free streaming really compete with subscription models?

There are signs of a trend in the booming streaming market. For the Germans it is nothing new in itself. For decades we have been used to the fact that commercial television and selectively in the TV program of public service advertising flickers into our living rooms.

The US Internet company Amazon is also focusing on advertising revenue with a new streaming offer. Users watch series with commercial breaks, but it’s all free. How strong will this trend be in this country?

When streaming – i.e. the retrieval of moving image content on the Internet on platforms apart from continuous, predetermined TV programs – became established, many providers relied on income from subscriptions instead of advertising. Netflix, Disney, Apple, DAZN, Sky and also Amazon with its streaming service Prime Video rely on the subscription card. Many Germans like to stream and have several subscriptions at the same time – Netflix and Amazon are ahead in studies and with market observers in this country.

advertising instead of costs

There are also mixed models: For example, the RTL Group’s RTL and ProSiebenSat.1’s Joyn platforms offer free advertising-financed offers, while these platforms also have subscription models. Now advertising financing in streaming is getting a major boost with Amazon. The advertising market is attractive for video providers, as has been seen for decades in the TV market, where billions in sales are generated. Or also on Youtube.

A closer look at the Amazon Freevee offer, which started on Wednesday: films and series are shown at no additional cost, but with commercial breaks. After the USA and Great Britain, Germany is the third country in which this offer is placed.

“We offer users an offer that they would typically expect behind a paywall,” said an Amazon spokesman for the German Press Agency. It will be a mix of in-house productions, external films and series that are in the portfolio through licenses, and perspectively linear TV channels. Amazon Freevee will initially offer thematically programmed linear live channels – for example BBC Food or BBC Travel. All channels are available in German.

Austria should follow

The co-head of Amazon’s content business, Ryan Pirozzi, told dpa about the goal of Amazon Freevee: “We want to reach as many customers as possible.” The group did not name a target for Amazon Freevee in terms of customers and sales in Germany. Austria is to follow as another European country at a later date.

Amazon is already present in the streaming market with Prime Video. The moving image service is part of the Prime subscription, with which you can also listen to music or save on shipping costs when shopping on the Amazon platform. Recently the subscription price increased.

The consulting and market research company Goldmedia sees possible effects from the new free Amazon service. Goldmedia Managing Director Klaus Goldhammer told the dpa about the offer: “It could set up the streaming market in Germany again.” Those who have shied away from subscribing until now could now be attracted. Likewise younger people who do not have the purchasing power.

Goldhammer also assumes that there will be an impact on the traditional television advertising market. Linear private TV broadcasters such as the RTL Group or ProSiebenSat.1 could face competition because advertisers might go to Amazon Freevee. For public service broadcasting with ARD and ZDF, which are currently expanding their media libraries and streaming services, new competitive pressure could arise, added Goldhammer. Because people who wanted to stream without a subscription and found what they were looking for on ARD and ZDF now have another option to choose from.