Parrot quotes Jeff Bezos statement that ‘Prime Video members buy more from Amazon than non-Prime members’ and asserts that (consequently) ‘it is not a surprise that the company has expended its focus from producing sophisticated award winning-shows (..) towards trying to find a mass-market blockbuster in the vein of HBO’s Game Of Thrones’, echoing a version about the oncoming Lord Of The Rings series to cost 500 million dollars for two seasons.
Later, Parrot ‘contextualizes’ Amazon Prime’s “Cost Per First Stream (CPFS)”, an index that divides the ‘cost of producing and marketing’ the season, by the number of “First Streams”. Parrot applies the “average demand” it has found to exist over the airing period or a 30-day period when the entire season is released at once. The chart shown here ‘reveals clusters of shows’ that have been qualified as “Subscription drivers”(High audience demand, los CPFS), “Churn reducers” (High audience demand, high CPFS), “Niche attractors” (Low audience demand, Low CPFS) and “Low Return-On-Investment (ROI)” shows when demand is low, CPFS has been high.
According to this evaluation, some of shows ‘appear to appeal more to existing subscribers’, a category considered ‘extremely important to all streaming platforms’. “Niche attractors” are considered to bring viewers ‘new to the platform’; content that appears in the “Low ROI” category are prone to cancellation.
Parrot defines Bosch and Sneaky Pete as ‘closer’ to the average CPS expected by Amazon; Bosch is described as ‘a cornerstone of Amazon’s scripted programming’ and Parrot assumes that ‘Season 1 performed well, and was seen by the producer as a subscription driver or churn reducer, with only the subsequent season 2’ appearing in the low ROI ‘quadrant’.
Parrot clarifies that ‘it would be very surprising indeed’ if CPFS ‘was the only’ metric applied by Amazon to evaluate the result of its shows, adding that this metric is not fair to second seasons because a majority of new viewers will choose Season 1 to start watching a series. It considers that this analysis ‘sheds further light on how OTT platforms need to be evaluating the acquisition, cancellation and renewal decisions’ in order to decide future investment in content inventory.