Amazon bundled Prime Video into its $80-a-year Prime membership as an "oh by the way" add-on, absorbing streaming costs into existing fees. This low-friction approach mirrors Netflix's move from DVDs to streaming, letting both companies acquire users fast and turn content into pure profit once the platform was built.
Do you know about the Amazon Oh By The Way offering? No. Back in the day when Amazon was moving into Prime Video. So keep in mind they had Amazon Video On Demand that didn't work out. They had Amazon Unboxed that didn't work out. You know how Amazon Prime, you pay $80 a year for it right now or whatever. With Amazon Prime, they weren't like, oh, we're going to charge you more money for this. It's just like it's rolled into the cost, right? And the whole thing with this is like once they pay for like the hosting and everything else, like, you know, this marginal cost, like everything is just profit afterwards, right? They just need to acquire more users. And so Amazon, what they said back in the day was like, because they had to compete with Netflix, like, oh, by the way, like you guys get this, this free library of content from MGM and all the new content that we're producing is just included, right? Netflix did that back in the day too. So when they had the DVD subscriptions, there's a lot of costs tied in with that. So when they started, they launched streaming, they're like, oh, by the way, you guys get streaming too. Eventually streaming overtook their DVD rental business like very quickly. And Netflix became Netflix. But it takes guts to be able to make that bet and look into the future and do it like an oh, by the way type of offering because trying to charge people a separate thing, there's more resistance to it.
