Amazon Prime Video’s new superhero satire is too niche to be a big hit, but it pieces into Amazon’s strategy of taking shrewd advantage of the blind spots of other businesses.
As I write this sentence, I have watched six of the eight episodes of “The Boys”— the superhero series that Amazon released on Friday, June 26th.
“The Boys” is great fun, occupying similar thematic territory as the Deadpool movies. In other words, it’s a live action, profane, funny, dramatic, sad, action-packed satire of the many hit superhero movies and television shows released over the last decade. It takes particular aim at DC Comics’ Justice League since several characters are thinly-veiled versions of league members: Homelander is Superman; Queen Maeve is Wonder Woman; Black Noir is Batman; A-Train is The Flash; The Deep is Aquaman.
The conceit, put simply (and please forgive the bad language), is a question: what if superheroes were assholes? If you have a stomach for dark humor and violence clad in tights, then the show is well worth watching.
But this is not a review.
“The Boys” is a puzzle. Why would Amazon greenlight, create, and showcase an expensive show with a relatively narrow audience and that is unlikely to win any awards come Emmy season? It could have spent a tenth the money and made it as an animated series, going several steps past The Simpsons, Rick & Morty, and Adult Swim. Instead, it’s live action with recognizable cast members (Elizabeth Shue, Karl Urban), pricey sets and costumes, and lots of CGI.
One answer is that “The Boys” showcases Amazon’s habitual strategy of finding blind spots in the strategies of other businesses and then setting up shop right where nobody is looking.
Changing the default
Previously, I’ve argued that Amazon’s healthcare joint venture with JPMorgan Chase and Berkshire Hathaway serves Amazon’s goals beyond the stated one of reducing health care costs for Amazon as an employer. The health care JV will eventually connect Alexa, smart home, pharmacy purchases, and more into an inescapable Amazonian ecosystem.
However, instead of squaring up directly against a hospital, insurance company, or pharmacy chain, Amazon will make head-to-head comparisons so difficult that health care consumers will throw up their hands and just go with Amazon because it does enough at a fair price.
This is similar to what Amazon is doing with “The Boys,” and indeed with its entire Amazon Prime Video service: making head-to-head comparisons impossible.
It’s easyfor viewers to balance Hulu, Netflix, CBS All Access, Disney’s forthcoming Disney+, and AT&T’s forthcoming HBO Max against each other because each service has the identical value proposition: viewers pay dollars each month in exchange for streaming video content.
As the number of streaming services increase, viewers will find themselves making tough choices on a monthly basis (unless services adopt a better revenue model).
For a decade, Netflix was the default streaming service that everybody got because it was first, had (until recently) most of the studio content, and also created a lot of its own exclusive content ($15 Billion worth this year). That’s no longer the case because there are so many head-to-head comparable streaming services.
Amazon wants Prime Video to be the new default streaming service, and a key strategy in pursuing this is opting out of head-to-head comparisons by bundling Prime Video with its overall Prime membership benefits.*
Along with video, Amazon Prime subscribers get accelerated delivery, a Spotify-like music service, free Kindle books, discounts at Whole Foods, and much more for $119 per year. (This is nearly $37 dollars cheaper than the standard Netflix plan that doesn’t include the other services.) Amazon does this for the simple but compelling reason that Prime subscribers spend more than twice as much as non-Prime subscribers.
By lumping in Prime Video, Amazon has made it painful for viewers to consider giving up Prime because they’d lose so many other benefits as well.
Every time Netflix subscribers learn about shows and movies that are disappearing from the service, it becomes more thinkable for them to cancel their subscriptions.
In contrast, Amazon has made unsubscribing from Prime Video unthinkable.
Leveraging loss aversion
Behavioral economics has shown us that we illogical humans are more resistant to loss than we are interested in gain. Losing a dollar feels twice as bad as finding a dollar on the street. If you lose fifty cents, then in order to balance out the negative emotion surrounding the lossyou have to get a dollar.
By bundling Prime Video, Amazon has created psychological conditions where customers will see cancelling Prime as a loss regardless of how many other streaming services they get.
Unlike broadcast and cable channels that live and die by how many people watch individual shows, or streaming services that live and die by how many people subscribe, Amazon doesn’t need people actually to watch the shows for Prime Video to be a business and strategic success.
What it needs instead is for people simply to be aware of those shows so that the prospect of losing what feels like free (because it’s bundled) access to those shows will be horrifying.
That way, people will keep their subscriptions to Amazon Prime.
* Back in 2016, it was briefly possible to subscribe to Prime Video separately from Prime, but that is no longer the case. (A nice LiveChat representative from Amazon just confirmed this.)
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