Amazon could announce a new advertising video on demand (AVOD) platform as soon as this week, according to CNBC.
The news org said it has heard from at least five sources at media companies being approached by Amazon for content targeted to the platform, which Amazon has yet to confirm. CNBC said the platform could be officially announced at this week’s Advertising Week convention in New York.
In late-August, The Information reported that Amazon is developing an AVOD platform called Free Dive. The streaming video platform would be similar to the Roku Channel, an increasingly popular non-subscription video channel existing within the Roku ecosystem, offering archival movie titles and TV series.
Free Dive is reportedly being developed through Amazon’s Internet Movie Database (IMDB) division. It would be accessible to the 48 million Amazon Fire TV OTT devices currently in the market.
Amazon, of course, has a robust subscription video on demand platform that competes with Netflix and Hulu. And in addition to a transactional store that competes with Apple’s iTunes and Wal Mart’s Vudu, Amazon owns a somewhat unique niche in a la carte distribution, packaging subscriptions to streaming video platforms like HBO Now through its Amazon Channels platform.
In addition to generating their own revenue, these video components serve a larger goal of driving traffic to the broader Amazon store front, which controls more than half of the U.S. e-commerce market.
However, what Amazon doesn’t control a lot of is advertising sales. According to eMarketer, Amazon owns only around 4% of the digital advertising market, trailing fellow “FANG” companies Google and Facebook, which together control 57% of that market.
The AVOD strategy has certainly worked for Roku, which generated 58% of its overall revenue in the second quarter not from selling devices, but from peddling advertising on its platform.