Cord Cutters Rejoice In Competition

For those that have cut the cord to cable TV, a new competitor may be trying to woo you back.  The acquisition of DirecTv by AT&T has opened up a new streaming service of cable channels called DirecTv Now.  And with an introductory price of just $35 a month, subscribers will get access initially to 60+ channels; spend a little more and get more packages of services.  Of course there is the added fee of broadband access and AT&T is offering its customers no data charges to access the service.  That is a huge win for AT&T Wireless and DirecTv Now customers. Data streaming costs could potentially add to customer spending should they choose these streaming services over cable. 

DirecTv is the latest entrant in the streaming business for live channels.  They will be competing with Dish Network's Sling TV and Sony's Playstation Vue.  If live isn't important and on demand is what you care about, then you can always continue subscribing to Netflix, Amazon Prime, Hulu, and others.  But should live streaming become a lucrative business, expect these services to try and build out their business to include access to live channels, too.

Can cable television operators like Comcast and Charter find subscribers coming to them or fleeing for these streaming services?  It depends on what low cost packages they offer to retain their value proposition.  Unfortunately where I live, Comcast has announced plans to raise fees for its various services.  Comcast and others will have to rely on its other businesses to grow.  What affect this cable price increase has on its subscriber base will be seen next year in its quarterly earnings statement.  I fear they may be hurt as streaming services like DirecTv Now take a bigger and bigger bite from their cable business. 

DirecTv Now isn't taking their new business for granted.  Reaching out to younger demo audiences, they have created an exclusive channel around pop music star Taylor Swift.  Expect more content exclusivity to be announced across all competitors to woo customers to subscribe and retain their respective services.  Competition will be good news overall for customers.

Should Amazon Add A Sport Tier?

If there was a piece of content that truly helped to drive usage, then it must be live sports.  It has been both a blessing and a curse for those that seek to license it and distribute it.  Sunday Night NFL on NBC has helped the broadcast network build audience share and promote other content offerings.  Major league sports, including the Olympics have driven up bidding wars to attract audiences to their respective networks.  But it has come at a huge cost, too.

Look at ESPN and the success it has had over the years from live sports.  From picking up baseball games and Monday Night Football to major tennis and soccer coverage, ESPN has built a large following and become an important network on any cable providers' line-up.  But the cost to license this content has also driven up their license fees to those same providers which then increase their subscriber fees to the customer.  And finally the customer has pushed back, through cord cutting, and ESPN finds itself losing its subscriber base.  ESPN's parent company, Disney, may now be mulling spinning or selling off the ESPN brand. 

 Enter the next technology platform post cable called streaming which is attracting those cord cutters to subscribe and watch.  Amazon Prime offers movies and TV shows but may now see that to compete in this space it must offer live content too.  And they potentially see the answer in sports content.  According to the Wall Street Journal, "the e-commerce giant has been in talks with heavy hitters like the National Basketball Association, Major League Baseball and the National Football League for the rights to carry live games, according to people familiar with the matter. It also has talked with soccer, lacrosse and surfing leagues, the people said." 

Any streaming rights deals negotiated by Amazon might lead to lower license fees for ESPN's cable carriage.  Or Amazon might consider talking to Disney about buying ESPN.  Still given the already high costs of sports content, one worries if any profit can be squeezed out.  With rising costs, both on TV and at the respective sporting event, customers can no longer afford to go to the game keep a cable subscription with a sports package.  Ratings have leveled off, if not dropped, and sports content may have lost some value. 

Is sports the right move for Amazon to grow its streaming business?  Will customers pay more for content that once was free on broadcast TV and less free on cable.  Or will it ultimately shrink the customer base, lessen interest and shift viewer interest to other content.  Interestingly, this year's political coverage did just that, shifting eyeballs away from the game to the debates and other election coverage.  And it ultimately showed that even sports can be beat. 

The Demise Of Cable TV

The threat of cord cutting is affecting many cable operators and networks.  Nielsen just announced that ESPN lost 621,000 subscribers in just a month.  And other networks are feeling similar losses of subscribers and the fees they receive.  Many attribute cord cutting to the high costs of a cable subscription but there may be other influences.

In the early days of cable TV, many homes were lucky to get more than 35 channels delivered to their cable box.  They included your local broadcast channels, and nets like USA, ESPN, MTV, and CNN.  Over time, more channels were created and technology was pushed to add more channels to the home.  Each new channel tried to offer something new to the mix.  Unfortunately over time, as channels proliferated, they stopped looking niche and different and started to morph into general entertainment.  Bravo once represented a high arts and culture channel, MTV was short form music videos, and TV Land was classic TV shows.  Not anymore.

The NY Times wrote of another channel that has made the same switch from its core programming to general entertainment.  SundanceTV, once known as the Sundance Channel, a showcase for independent film and documentaries, will be presenting a daily daytime block of classic TV shows including All In The Family, The Mary Tyler Moore Show, and M*A*S*H.  Shows already found on other broadcast nets as well as other cable nets like Me-TV and Decade.  Shows that once were the staple of the TV Land channel, but no longer as they have delved into new original programming.  This is not to criticize these particular channels since every other channel is doing similar moves to broaden their appeal with general entertainment style programming to appeal to the widest audience and drive ratings and ad dollars.  But it leaves viewers dissatisfied. 

As The NY Times correctly states, "The truth is that a day is about 20 hours too long for many cable channels to sustain a coherent identity."  And so they fill the majority of their day with programming that could be placed on any other channel.  Channel brands get lost as they all start to look alike.  No longer is AMC a movie channel, no longer is A&E high arts and entertainment, no longer is CMT country music.  They have become generic wannabees of each other without focus.  The industry let too many channels to form with similar formats and once they got tired of competing within their niche went forward to compete with every other channel. And to do that they needed to broaden their reach with general entertainment shows. 

Add to that a bigger load of commercials every hour and the TV viewer has become disenchanted with cable television and network brands.  They all look alike and so our search for something to watch has become purely program based and not channel based.  And it has opened the door to subscription services like Netflix and Amazon that let us pick particular shows to watch with no commercial interruption. 

Cable networks have lost their way.   The move by Sundance to add a classic TV programming block is just one example of what they are all doing.  A move from a focused genre to a "broadcast" mindset.  Too big, too many, too vanilla. It is no wonder that viewers keep pushing away from cable TV.  And it may be too late for the industry to fix itself. 

Netflix For Sale?

While no official word, the market is speculating that Netflix is for sale and that Disney is interested in acquiring them.  Of course, there is nothing yet to prove that Netflix is ready to be taken over or that Disney is ready to make an offer; still, it raises the question, is it a good fit or better for another company. 

Disney certainly is a content and distribution powerhouse with the capabilities to both produce and distribute great TV and film content.  With ESPN, they also bring a sports component to the mix and with the theme parks, another way to market and appeal to consumers.  But in building their brand, the House of Mouse has a particular identity. 

Netflix, on the other hand, streams content from everyone and creates unique content, some extremely graphic, that is not consistent with the Disney brand.  Netflix is Switzerland, not beholden on any particular cable network or studio, free to deliver content across all genres and all interests to all interested subscribers.  It seems to me that a Disney ownership has the potential to restrict that freedom and change Netflix to an identity that caters more to streaming Disney content.

Should Netflix be up for sale, I would suggest other companies could make a fit.  Apple and Amazon are the first two to come to mind.  Each would bring strong synergy to the mix and each could further grow the Netflix brand.  Others that might want to think about entering the streaming content fray include Microsoft, Intel, AT&T and Verizon.  For the longer term future of Netflix, I see these choices a better fit than Disney.  We will have to watch and see how serious this current rumor is. 

Apple Music Beats The Rest

According to the recent JD Powers was ranked first in customer satisfaction.  According to CNET, "Apple's streaming service, which hit 17 million subscribers in September, ranked particularly well in performance and reliability, content, and ease of use, J.D. Power said."  In second place was Rhapsody, in third Pandora, followed by Spotify, TuneIn, Amazon Prime and last was Google Music.  Apple Music was particularly noted for having exclusive content as well as its accessibility and ease of use with peripheral devices. 

And while Apple was slow to enter the space, they certainly have grown at a nice pace.  At almost $10 month at 17 million customers, the business is becoming quite a revenue driver.  Getting noted by JD Powers should only help to drive further customer acquisition. 

Apple Event September 7

Next Thursday, just 8 days from today, Apple will once again try to dazzle us with its next set of upgrades.  Just in time to have on the shelves for the Holiday Season, many expect the next iteration of the iPhone, as well as upgrades to its Apple Watch and mac computers.  Upgrades yes, a new product launch no.

Given the rumor mill that always precedes these events, none have included or hinted at a new product release.  No Amazon Echo clone, no Apple car, no Apple TV set.  No buzz means that we can expect to simply here how each product has been tweaked to encourage us to upgrade our own devices.  And don't expect that Apple announces plans to acquire any content companies.  As much as we would love to hear them make a play for Scripps or CBS or Netflix, that is also an unlikely scenario for the event on Thursday. 

Be careful though if you do decide to upgrade your iPhone when it comes out.  You may find that it no longer syncs with your older mac and iTunes program.  That means you can't back up on a computer and must do it online.  And cloud backups will cost you.  The more memory you use on the iPhone or iPad, the more storage it may cost you.  Given the need for more icloud storage, expect too that Apple will announce new service plans to support you and your family's devices.

It has been rumored that the iPhone 7 may no longer have a separate headphone jack.  All connections are made through the lightening adaptor or via bluetooth.  As to those folks that have a Beats Headset, now owned by Apple, you will have to decide whether to buy a new bluetooth headset or stick with your old iPhone.  For Apple, Beats was all about the music subscription service and not the products.

So get revved up for next Thursday.  Always fun to watch the announcement and see how the stock market immediately reacts to it.  Enjoy!

CBS's Newest Revenue Stream

The rise of streaming, the challenge to increase ad revenue as well as licensing of its network to cable companies all play into the strategic mix as CBS seeks revenue growth.  Certainly content matters and quality shows that generate buzz hope to find audiences that stay loyal to their plots.  And building new distribution outlets to grow as a business remain relevant.

In the case of CBS, they chose not to be a partner in the Hulu streaming business.  The other three broadcasters NBC, ABC, and Fox, and now Time Warner have ownership shares in the Hulu business.  Instead, CBS is trying something new, its own streaming subscription service called CBS All Access.  For a $5.99 monthly fee, subscribers get "more than 7,500 on-demand episodes from the current season and previous seasons of classic shows, as well as the ability to stream local CBS stations live in more than 150 markets across the U.S." according to Multichannel News.  And following the learning curve of other streaming services like Amazon and Netflix, CBS All Access will offer original productions too, "including Star Trek: Discovery, a spin-off of The Good Wife and a new digital edition of Big Brother."

The question this strategy hopes to answer, is it better to build a new service or partner with an existing one.  Is there enough content of interest to subscribers to entice them to join?  Can marketing sell the value of adding another streaming service charge to the entertainment household budget?  CBS is trying to make it easy to access its streaming service with Roku, Apple TV, Chromecast, XBox, Amazon Fire TV and more.  Accessibility does not seem to be a problem.

But I wonder if going it alone and not with Hulu, CBS studied whether a brand name associated with the broadcast network or one without a connection made more sense.  Will customers more likely embrace the subscription service because of the CBS name or feel that they should be getting this content already if they are current cable subscribers with on demand.  Would it have better suited the service to create a more unique name like Carousel or Tainment or StreamCity to compete in the streaming media landscape?  Was CBS All Access a better name choice to drive subscription revenue?  We will watch and see. 

The Profit In Data - Storing And Streaming

I'm struck by an epiphany as I watch how much data I continue to acquire.  I don't mean bookshelves or albums or DVDs; they get less filled as my books, my music, my photos, my videos, my life are all now bits and bytes of data.  And I see too that the cost to store and stream continues to grow as I accumulate more stuff. 

Already, I have on my computer over 15,000 photos, the more recent ones requiring more memory than the ones taken in 2000.  My iTunes account includes more and more downloaded books, music, and videos and my computer's memory is nearly at capacity.  My Carbonite account helps safeguard these digital assets, at a cost, as I sense that I will need a new computer with more memory in the not too distant future.  And Apple is gracious enough (lol) to sell me more cloud backup space for my iPhone and iPad.  The costs to store will only continue to rise.

And then there are the costs to stream data.  Subscription fees from folks like Netflix, Hulu, and Amazon, help drive up the monthly costs.  One's love of music means monthly subscription plans from Pandora, Spotify, and Apple Music.  We no longer need to own when we can rent and stream as much as we want.  But the costs to access also extend to the companies that sell us data plans to receive these streaming signals.  The more we stream, the more we consume, the more data services we buy.  Of course, the speed to receive these streams can also come with a higher cost; the faster the stream, the more we pay. 

As we move further and further from physical media to digital media, the cost to access data, stream it, and receive it will only increase.  And the profits will only grow.  Data is our new gold and we are mining it at an ever increasing pace.  It is the business to be in. 

Will Content Glut Reach A Tipping Point?

The rise of digital distribution has created an insatiable thirst for more content to fill the bucket.  Video content is being produced not just for broadcast or cable, but for streaming services as well.  We are seeing the numbers rise for both short form content, user generated content, and scripted series as well.  And as Investopedia tells us, "John Landgraf said the number of scripted television shows next year could reach 500, from an estimated number between 430 and 450 this year, driven mainly by a rise in shows commissioned by streaming services." Landgraf, CEO of FX Network, places responsibility on the streaming media services like Netflix and Amazon.  But Hulu, of which Fox Networks are an owner, could also be named as well.

The challenges of producing so much content include finding quality programs amid the morass of choice, viewers finding the needle in a haystack of endless content possibilities, and measuring success in today's overly saturated content world.  With so much content choice possible to see and hear, focus becomes close to impossible and harder even to search for and find.  With such a glut of content, it becomes even more important for us to use recommendation, marketing, and advanced search to help users find a match to content they would enjoy viewing.

The drive to create content is only advancing.  In coming years, the numbers will only increase.  Today, in fact, Turner announced an investment in Refinery29, a female skewed destination for fashion and entertainment, and one in which Scripps is also an investor, to support more content that could possibly make its way onto their channels.  Content is the fuel that runs digital media distribution.  Consumer thirst for more helps to drive subscription and cable revenue streams.  And with advertising alongside it in some way, deliver more profit to media companies.  Have we reached a tipping point?  Probably not, although the challenge for creative minds is to make the content produced quality worth watching. 

Comcast Says Future Of TV Is X1

Great read in Business Insider called  "How the battle for TV's future could take over your whole house".  Matt Strauss, EVP of Comcast Video Services, sees TV evolving in a new way.  The TV continues to be the centerpiece of the house and that smarter features out of the X1 cable box offers the user more control.  "X1 is a cross between an advanced TV guide and a virtual assistant, and Comcast thinks it will compete with the likes of Amazon's Alexa-powered Echo and Apple's Siri-powered Apple TV."  With a touch of the microphone button on the remote, the X1 box can find channels, shows, answer simple questions, and possibly more.

Strauss believes that the X1 box can be the "hub" for which the home can likely get smarter.  As we tend to have TVs in almost every room, attaching an X1 box to each TV that all communicate up to the cloud and share back info, creates a unified smart home experience.  And while we may not always want the TV screen to be on, the X1 box is always on.  That opens itself up to a larger future.

From my own experience with X1 so far, I see the potential.  The next generation of boxes will need to work on voice command without remote button push, like the Amazon Echo.  One could say, "X1, what is the weather today",  just as we ask Alexa.  It could potentially then answer back rather than put answer on screen.  Than we could say, "X1 turn TV on or off", again without a remote button push.  The future possibilities are endless.  Perhaps a partnership for Comcast and Apple Siri to explore.

As to the Comcast plan, As Business Insider suggests, "So for Comcast, winning the future of TV could mean winning the entire house in the process."  I agree.

Walmart Buys Jet.com To Catch Up To Amazon

Today, Walmart announced that they are indeed buying Amazon competitor Jet.com.  Likely to close by end of year, the rationale to purchase seems obvious, play catch up to Amazon. But to make it work, the strategy will require a visible way to make the physical stores and online presence a bigger, better, more enticing experience than what Amazon already offers.  Not an easy task.

According to the NY Times, "Under the deal, Walmart and Jet will continue to operate as distinct brands."  Walmart believes initially, they will have leverage to price their products lower and yet still profit.  But as Amazon demostrates, it is more than just lower prices.  Convenience, delivery, a wide range of products and services from many vendors, plus the Prime business of cheaper delivery and streaming content truly helps the Amazon brand.

Walmart and Jet.com, operating independently may not be an ideal fit.  Finding the synergistic elements as well as the marketing approach that clearly shows the benefits to the end user are essential.  That will take a lot of work.  Done well, it could make them a venerable competitor.  It could also draw in other brick and mortar retail operations to build out their own delivery operations as well.  We see it already with supermarket chains offering home delivery services.  And department stores seem willing to ship for free merchandise not already available in store for pickup to the home.  So for Walmart, Jet.com must do something more to take away Amazon market share. 

Once the acquisition closes, it will be fascinating to see how good a fit the two brands can make.  But the real win will be if it adds value to the operation and delivers results that exists today.  Retail is a tough world, operating on thin margins.  Walmart and Jet must see that this merger is a good move for both. 

Is Time Warner More Appealing To Apple

Time Warner released its quarterly earnings and the news seems to be well received.  With future earnings expected to rise, the content business is growing.  At the same time, Time Warner announced plans to buy a 10% stake in Hulu, a streaming competitor of Netflix and Amazon.  HBO continues to operate outside the Hulu platform with its subscription service HBO Go.  That service is also growing.  And lastly, there are rumors that Hulu plans to build a streaming platform to offer live feeds of cable nets.  Adding services like CNN, TBS, and TNT to Disney and Fox sounds like the start of a compelling OTT competitor to cable. 

Does this make Time Warner a more interesting asset for Apple?  To own HBO, cable nets and a piece of Hulu could be a real get for Apple.  And it would instantly propel Apple into the video streaming space with major content players.  Add to that the Warner Bros studio and Apple could apply its influence into more immersive theatrical film experiences. 

Amazon Shows Real Growth

The US Economy may be sputtering, but not Amazon.  Its online retail business, its cloud business, its subscription business all are growing in double digit figures.  And Wall Street seems to be happy with how Amazon spends its money too.  Per the NBC New report, they are building more distribution centers, investing in more online content, and spending where it matters to drive future growth and profitability. 

And while I have seen little about how well its products are selling, Kindles, Echos, etc., the infrastructure is expanding to manage it.  Where Amazon expects to be in 5 or 10 years remains to be seen.  Will its cloud business be the catalyst for future growth or is online retail the centerpiece of its empire?  And what future diversification is in store for the company?  For now, Jeff Bezos, CEO, isn't revealing his hand; but, he surely has some aces under his sleeve. 

Is Alexa More Than A Fad

Check out the recent article in the NY Times called Alexa, What Else Can You Do?  Getting More From Amazon Echo.  It offers additional tips and tricks to make your device a more valuable component to your home and the center of your Smart Home.  It's a good idea but I wonder how many homes have embraced Alexa to such an extent.

We have Alexa in the home and its most useful feature seems to be to tell us a joke.  We have yet to connect it to the HVAC or any electrical device.  We don't subscribe to Amazon Prime so don't push our music through it.  And it is relegated to the kitchen with the need to shout to access it from a nearby room.  For us, for the moment, it is merely a fad.  But a fad that is simply ahead of its time before it converts to must have.  How long it might take to achieve necessity requires too many what ifs. 

Apple Products Stall As Services Rise

It seems that consumers are keeping their devices longer and that the need to upgrade iPhones or iPads too frequently is not necessary.  That's not to say that people aren't buying Apple products, they are; rather, that innovation hasn't been enough to cause consumers to change out their device. And as a product company, Apple can no longer rely on their present product line to deliver the growth that the market demands.  On the other hand, its service side continues to grow as theses products demand more apps, more cloud storage, more content to satisfy the need of the user.  Its service size, per financial reports grew 19% in the quarter and by itself is a $6 billion dollar business.  That is not a meager amount.

But Apple is more than that. And the Apple Watch has not yet become the must have device that people expect.  It is time for Apple to tell us why we need an iWatch, the Apple TV, or some not yet named product.  Will it be an Apple car?  I would rather see Apple license its technology into every other car manufacturer. Is it a Siri clone of the Amazon Alexa?  Is it a video streaming content subscription business?  Is it smart appliances in the home? 

And how will Apple show that it is once again a growth company.  An acquisition would make sense.  What about Sirius or Netflix or Viacom or CBS?  What about Microsoft?  It seems time for Apple to reveal more of their hand.  They can no longer rely on yearly product upgrades to maintain the fan fanaticism toward Apple.  It is time to get ahead of the curve again. 

Netflix "Ungrandfathered" Me

Hey Webster Dictionary, it's time to add a new word - ungrandfathered.  Per Netflix, it is the act of eliminating any price discount associated with being a long time subscriber and substantially raise your monthly fee to match with new subscribers.  And while Netflix may see a revenue bump, they may also face higher than typical churn rates too.  And with significant competition from Amazon, Hulu and others, Netflix can't expect rate increases to help their future. 

Of course, Netflix has more to worry about as my blog yesterday detailed.  When quarterly financials came out, Netflix failed to hit a number of metrics, including important growth numbers.  And while there was some growth, it was well short of expectations.  Churn will only erode those gains.  It is time for Netflix to actively find additional revenue streams to drive business growth.  And they must start soon. 

The Future Success Of Netflix

Nothing lasts forever.  Even Netflix knows that; they watched their DVD business erode while working to navigate the streaming world.  It was a bumpy ride along the way but the result so far has been quite impressive.  But growth appears to be declining, according to the Wall Street Journal, and international challenges and content costs aren't helping. 

In August, the remainder of the U.S. subscriber base will see its monthly fee rise to $9.99; for my household that is $2 more a month or a 25% increase.  Yet that is not enough to satisfy investors in the business seeking more future growth from the streaming giant against greater competition from Amazon and Hulu.  So what is Netflix to do as its Act 3?

Of the options to consider, Netflix might want to build out a streaming tier of live content, at an incremental cost, as a skinny bundle to drive more cord cutting. They could add more advertising to the mix, either with an ad supported option or with more sponsored content to the stream.  Netflix might consider growing through expansion; perhaps the purchase of a studio like Paramount or some cable networks.  For Netflix, standing still is not an option.  They learned that lesson from their DVD rental business.  Existing growth of its subscriber base will dry up and future revenue growth must come from other business platforms. 

Less Commercials To Save Linear Television

We gravitate to streaming services like Netflix and Amazon Prime so that we can watch our video content when we want and how we want, without commercials.  It has been the rise in commercial minutes per hour that has hastened the departure of viewers from linear TV. But perhaps slowly, networks are recognizing that too many commercials may be a wrong play.

Starting next year, Saturday Night Live, an NBC late night staple for 40 plus years, is reducing the number of commercials by 30%.  According to Ad Age, "It will do this by removing two commercial breaks per episode, giving viewers more content, said Linda Yaccarino, chairman-advertising sales and client partnerships, NBC Universal."  In addition, it will also use branded original content to drive ad revenue.  It may not be as blatant as Jack Benny selling Lucky Strike cigarettes or Jello, but it will certainly attach a particular brand to real content.  Certainly more appealing than most of the commercials that currently air.

The article also adds that other cable networks are also considering reducing ad load.  "Viacom and Turner are also working to reduce the number of commercial minutes in prime time."  Let's hope that more follow.  And while the cost of an ad may rise, so too may be the number of viewers that stick with a linear show and continue to watch. 

Netflix Slower Growth A Challenge

Like a good multi-level marketing ploy, its hard to grow endlessly before reaching a max.  And while Netflix has exceeded 81 mm worldwide streaming subscribers, each paying a healthy monthly fee, the growth curve is flattening.  That means the challenge to keep growing at double digit rates seems no longer possible.  And it may be harder and harder to find the next new sub especially as prices rise and future customers need more incentive to join.

The future is international, but there are risks too.  Can Netflix find new revenue streams to drive business growth?  Will they need to start cutting some costs to improve profit yields?  Has the market hit some maturity that could lead to upstarts taking some of the Netflix business away? Will Netflix need to keep spending more for original content and better libraries of content to compete against Amazon and others, thus hurting profit margins?  And while current subscribers are very happy with Netflix and thus not dropping the service, can Netflix add incremental value and revenue without hurting the bottom line?

These are the challenges facing the streaming industry and Netflix in particular.  It is hard to keep growing at these previous amazing rates when the market hits saturation.  Add changing interests and other internal and external forces, and the business model is continually challenged.

Amazon Prime Has Unbundled

For those cord cutters who don't want to pay $99 a year for Amazon Prime and its entertainment video package, Amazon is offering a monthly rate instead.  For only $8.99 a month you can subscribe to the service with the ability to cancel anytime.  And according to Techcrunch, "You can also choose to subscribe to Prime for $10.99 per month. You get access to expedited shipping, Prime Video, Prime Music, the Kindle Lending Library and probably a bunch of other stuff that I’m forgetting."  If cash flow is your issue, the new Amazon offering provides a smaller monthly fee. 

But if a $99 yearly cash outflow doesn't hurt your pocket, the simple math proves that buying the annual membership is the better value of about $10 for the video only package, $32 more for the full package of Prime services.  Heck if Netflix offered an annual discounted payment, they likely would find a strong conversion by existing subscribers although a lower revenue stream. 

Will the new payment structure encourage new subscribers to try the Amazon Prime service?  There is certaily no savings if all you wanted was the video offerings.  Given the pricing, it seems like you might as well pay the higher fee and add books and music to the mix. 

I am not an Amazon Prime customer.  I don't buy that much from Amazon to see value from the expedited shipping and have yet to find a must-have show that would drive me to purchase.  I do believe the ultimate driver for Amazon Prime is geared to those that utilize them frequently for purchases.  The entertainment library is the added value to the package.  I would love to see a comparison of Amazon Prime to Netflix and Hulu for number of monthly streams and hours per household utilized to see how each service is treated among its subscriber base.  Given the proprietary nature of the business, I doubt that info will ever be shared willingly.