Amazon’s Channels to Generate Estimated $1.7B in 2018 Revenue

BMO Capital Markets shines light on direct-to-consumer platform
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Amazon’s Prime Video Channels service will generate an estimated $1.7 billion in revenue in 2018, BMO Capital Markets predicts.

The tally represents more than a doubling of the $700 million BMO said that Channels wrought in 2017.

Factoring in a speculative 70% average cut Channels doles out to content partners including HBO, Showtime and CBS, just to name a few, total revenue of $1.7 billion translates to revenue of $500 million for Amazon … without producing a single show for the platform, or really doing much of anything in the way of marketing.

Related: Ad-Free CBS All Access Available Via Amazon Channels

By 2020, BMO predicts that Prime Video Channels will generate total revenue of $3.6 billion, keeping as much as $2.5 billion for itself.

"We believe [Channels] is a material driver of standalone OTT subscribers for many entertainment companies,” representing anywhere from 25%-45% of total OTT users depending on the channel,” BMO analysts Daniel Salmon and William Lowden wrote in the report." analysts Daniel Salmon and William Lowden wrote.

Amazon Prime Video Channels delivers 156 streaming video services in the U.S., handling billing and signup for its partners. The service is also available in the UK, German and Japan.

Channels is one component in a broad Amazon Prime Video offering, which also includes movie and TV show rentals and sales, as well as an SVOD services that offers popular original series including The Marvelous Mrs. Maisel.

Amazon doesn't break out the performance of its various video businesses in its earnings report, leaving analysts and press to come up with exercises in guess-timation. 

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