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A version of this story first appeared in the Feb. 6 issue of The Hollywood Reporter magazine.
Overstock.com wants to follow rival Amazon all the way to the Golden Globes.
Nine days after Amazon took home two trophies for Transparent, Overstock announced that it has streaming video ambitions of its own. Better known for discount blenders and duvets, the Salt Lake City-based e-retailer plans to launch a VOD service offering 30,000 titles by the middle of the year, with the goal of adding a subscription streaming service and even original series. Overstock, which has between 25 million and 40 million monthly unique visitors, will offer streaming — at an additional charge — to members of its Club O in an effort to boost the $20 annual membership, which offers free shipping and discounts.
It’s a similar strategy to what Amazon has employed with Prime Instant Video to make its $99-a-year subscription more attractive to its estimated 40 million members. “We will be a competitor to Amazon,” asserted Overstock CEO Patrick Byrne during his Jan. 20 reveal at the NATPE conference in Miami, noting that the service is meant to help further monetize the company’s existing web and mobile traffic. But Frost & Sullivan analyst Dan Rayburn predicts otherwise. “To come out and say they’re going to challenge Amazon makes them look even sillier,” says Rayburn. “I’d be shocked if they brought something that’s not a trial to mass market.”
Overstock is getting some help from a not-yet-announced third party, which Byrne said has streaming rights for content from networks and studios. The company already sells DVDs and other film merchandise on its website, and Byrne suggested physical sales could help the company predict which films and TV series would also be popular streaming choices.
The studio and talent community, of course, would welcome another buyer for premium content. And several agents and execs say that Overstock, which had a third-quarter net income of $1.6 million on revenue of $353 million, would be taken seriously if it came to Hollywood willing to spend. But it’s unclear whether the company is able to make a significant content investment along the lines of Netflix’s $100 million deal for two seasons of House of Cards in 2011. Netflix earmarked a $3 billion programming budget for 2014, and Amazon said in July that it planned to spend more than $100 million during just the third quarter on original productions.
Even if Overstock is willing to spend, Rayburn notes that it could take years to develop the streaming ecosystem similar to Amazon’s, which allows people to stream Prime’s library of more than 40,000 videos across more than 600 devices. He adds, “I don’t see any advantage they would have in the market except as a me-too service that would be very limited in content.”
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