Prime Video: Amazon’s Secret Weapon in the Streaming Wars (And Why Wall Street Still Doesn’t Get It)

Forget AWS for a second—Amazon's real sleeper hit is gathering dust in plain sight.

Prime Video isn't just another streaming service. It's the Trojan horse that keeps 200 million Prime subscribers glued to their accounts—and their wallets. While Netflix burns cash chasing subscriber growth, Amazon quietly monetizes attention through the backdoor of e-commerce addiction.

The numbers don't lie: Prime members spend nearly 3x more than non-members. Video? Just the gateway drug.

Wall Street analysts obsess over cloud margins but ignore the flywheel effect. Every minute spent watching 'The Boys' is a minute not spent price-comparing on Walmart.com. Every 'Reacher' binge subtly reinforces the 'why pay elsewhere?' mentality.

Yet somehow, finance bros still value Prime Video like it's 2013 Netflix—as if Amazon hasn't turned content into the ultimate retention tool. (Then again, these are the same geniuses who thought the Metaverse would replace offices by 2024.)

The playbook's clear: Use Hollywood blockbusters to lock in retail dominance. While rivals fight for streaming supremacy, Amazon's already playing 4D chess—with your credit card as the ultimate endgame.

Image source: Getty Images.

Prime Video's strategic shift from perks to platform

When Amazon first launched Prime Video, it wasn't trying to compete directly with entertainment companies likeor. Instead, it used video content to increase Prime subscriptions, drive loyalty, and reduce churn. The focus was to delight its e-commerce customers, and that strategy worked. Happy customers became more engaged, spending more time and money on the e-commerce platform.

But what started as a defensive MOVE has become a strategic pillar. Today, in addition to getting free content as Prime members, customers can also subscribe to third-party channels offered by partners under the Amazon Channel. Besides, Amazon made another pivotal move in January 2024: it began running ads on Prime Video, instantly unlocking a massive audience of over 200 million globally to advertisers.

The streaming arm is also increasingly investing in originals, live sports, and localized content across global markets. In other words, Prime Video is quietly building up its ecosystem of services, positioning it well to evolve from a cost-center to a hugely profitable entity of its own.

Amazon Ads and Prime Video

Amazon Ads is one of the next growth frontiers for Amazon, in which Prime Video is going to play a major role.

By rolling out ads across Prime Video by default in key markets, Amazon steps up its monetization efforts of its gigantic Prime subscriber base. Prime members can pay a small monthly fee to go ad-free, but most don't, turning Prime Video into one of the largest ad-supported streaming platforms globally.

To put the opportunity size into perspective, Netflix has 300 million subscribers, of which 94 million use the ad-supported service. On the other hand, Disney+ has 126 million global paid subscribers. With more than 200 million viewers, Prime Video is already among the biggest streaming services provided globally.

But Prime Video doesn't run an ordinary advertising business. Its ad engine taps into its vast retail data, letting brands target viewers based on actual purchase behavior. A viewer watching an online video might see a relevant sponsored product ad and buy it on Amazon without ever leaving the app. It's a frictionless loop that few competitors can replicate.

Owning the connected TV stack

Prime Video isn't just a content platform -- it's Amazon's gateway to the living room. And through its connected TV (CTV) footprint, Amazon is building an end-to-end advertising and commerce engine few can match.

Amazon Fire TV, now with over 200 million devices sold globally, gives the company direct control over the connected TV hardware and software stack. This integrated approach allows it to collect first-party data, control the user experience, and serve ads more effectively than most CTV players. While traditional media networks are still figuring out how to merge streaming, commerce, and advertising, Amazon already has all three pieces in place.

The implications are enormous. Advertisers not only reach an engaged, high-intent audience on Prime Video, but they can also close the loop through Amazon's retail engine. That kind of direct attribution -- seeing a sponsored ad on Fire TV, clicking through, and buying the product on Amazon -- is a marketer's dream. With increasing demand for measurable, performance-based advertising, this positions Amazon as a formidable player in the future of CTV.

In other words, Prime Video plays a strategic role in Amazon's expanding ecosystem, in which commerce, content, and advertising converge to FORM a defensible business model that strengthens both the parts and the whole.

Now is the time to take a closer look at Prime Video

Investors often think of Amazon in silos: retail, cloud, advertising, logistics, etc. But the company's greatest strength lies in how these pieces connect. Prime Video may have started as a "nice-to-have" feature bundled into Prime, but it's quickly becoming one of Amazon's most powerful strategic assets.

By bringing together entertainment, commerce, and advertising into a seamless flywheel, Amazon is building a future where Prime Video not only entertains--but drives growth across the entire business.

It's time investors gave this overlooked asset a much closer look.