Amazon Video Direct’s New Compensation Rates May Leave Creators Feeling Burned

Amazon is instituting a new payment system for its Amazon Video Direct (AVD) platform — a product which enables any and all content creators to monetize their programming in various ways, including purchases, rentals, advertising, and inclusion within the Amazon Prime library.

It is that last Amazon Prime monetization channel that Amazon is reimagining as of March 1, 2018 in a move that could be perceived as a slight to indie creators and result in a hit to their bank accounts.

Amazon previously paid publishers 15 cents per hour for AVD programming consumed by Prime subscribers in the US and 6 cents per hour for international viewership (in the few foreign locales where AVD is available, which includes the United Kingdom, Germany, and Japan). Those dollar figures also come with an all-in $75,000 annual cap per piece of content.

But, going forward, in a letter shared with creators yesterday — as well as an update to the Amazon Video Direct support website — the company announced it will institute a new tiered payment system based on video engagement. Check out the new rates, which will apply on a per-title basis, right here:

In addition to the fact that Amazon is slashing the previous 15-cent rate by as much as 60% when a title has not amassed a staggering 500,000 hours of viewership, the company said that viewership counts will be reset annually — a further blow to revenues. “Hours will start accruing when the title is streamed for the first time and will continue for a 365-day period,” Amazon writes, noting that view counts will start from zero again at the beginning of each subsequent year.

The new compensation tiers seem ominous to creators whose videos do not drum up hundreds of thousands of hours of viewership. Furthermore, creators will likely be flummoxed by the fact that once a video has amassed more than 1 million hours of viewership, its payment rate plummets back down to the minimum six cents. Amazon, for its part, claims that the new system offers several benefits, including doing away with the

$75,000 cap, and aggregating all views globally so that there are no longer different rates for international consumption. This, according to the company, creates “expanded earnings potential in territories outside the U.S.”

When asked about the change, an AVD spokesperson told Tubefilter, “We are always listening to provider feedback, and iterating on their behalf and occasionally that will mean changes to our service.”

Some indie filmmakers, however, don’t necessarily appreciate these iterations. In order to get back to the 15-cent-per-hour rates they formerly pocketed, for instance, a two-hour movie would theoretically need to garner at least 250,000 views — which is an eye-popping feat.

“It feels disheartening to be told that our revenue is going to be cut by 60%,” says Zack Coffman, president of One World Studios, which distributes the cult biker doc Choppertown — as well as other projects — on AVD. “The new system rewards single popular films as opposed to people that have built engaged audiences and communities around multiple smaller projects. I hope Amazon takes a look at this and revisits — I just want to see some semblance of a fair transaction for my work.”

Upon its launch in May 2016, AVD was widely likened to a YouTube competitor in that it enabled all video creators to monetize content in different ways — including via exposure to the company’s reported tens of millions of Prime subscribers. Other ways creators can monetize their programming on AVD include selling or renting titles (in which cases Amazon takes a 50% cut) and an ad-supported offering (in which the creator pockets 55% of the ad revenue — just like on YouTube). AVD’s launch partners included StyleHaul, Kin Community, Machinima, and TYT Network.

Last October, AVD moved beyond its role as a distribution platform by financing three short films from Funny Or Die. In the past, the company has also offered generous incentives to get creators — including Sundance directors — to distribute their content on AVD.