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Amazon Takes Familiar Page from YouTube Playbook

Amazon jumped hip-deep into the video production pool Tuesday with the launch of its new Amazon Video Direct service, which allows Amazon users to take a page from YouTube’s playbook in terms of monetizing user-made videos.

The service will allow content producers to upload their own videos to Amazon and make them readily available to Amazon customers, including millions of Prime members. Videos can be rented or own, with the opportunity to generate revenue via subscriptions or advertising.

The internet began buzzing within minutes of the announcement, with some hailing Amazon’s new video posting service as fresh competition with Google, and others looking directly at how Amazon’s stock fared after the announcement:

First Netflix. Then HBO. And now, Amazon, is going after YouTube’s lunch. The e-commerce giant is opening its doors to video creators through a new service it’s calling Amazon Video Direct, even launching a program called “Amazon Video Direct Stars” to directly court YouTube’s top “stars” with big payouts. (IBT)

Amazon stock hit an all-time high on Tuesday, eventually closing at $703.07. That’s up $23.32 per share, or 3.43 percent from Monday’s close. At the day’s height, AMZN reached $704.55, a new best-ever. The close price is also a record close, as today marked the first time the stock topped $700. (The Wrap)

Partners participating in Amazon Video Direct have four distribution options. They can make their content available to Prime Video subscribers and receive a per-hour royalty fee; it can be sold as an add-on subscription through the Streaming Partners Program; it can be offered for digital rental or purchase; or it can be made available to all Amazon customers for free with ads, and creators will receive a 55% share of the ad revenue (the same as YouTube). (Variety)

For its part, Amazon is certainly eyeing the entire YouTube community with the new program. Video Direct launch partners feature several YouTube networks and creators including Machinima, The Young Turks Network, StyleHaul, Kin Community and Jash. Amazon can offer scale. Its website reached 165.1 million unique visitors in the U.S. in March, according to comScore. While Amazon’s desktop video audience is small — 2.9 million unique video viewers — a significant majority of video consumption is likely happening on its mobile and connected TV apps. Amazon claims Prime has “tens of millions” of subscribers. (digiday)

• The e-commerce giant said the service is designed for “professional video producers,” but its only requirements are that the videos be high definition and have closed-captioning for the hearing impaired. Amazon is late in challenging YouTube, which has over 1 billion viewers who help it generate billions of dollars a year in advertising revenue and create internet sensations such as PewDiePie. YouTube is looking to diversify its revenue with a subscription TV offering Unplugged that could debut next year. (AdAge.com)

• An Amazon rep says the company is offering 15 cents for every hour of viewing a video creator’s stuff generates via Prime Video in the U.S., and six cents an hour for views outside of the U.S. If video makers allow Amazon to show their stuff to any visitor, for free, Amazon will give them 55 percent of all ad revenue their clips generate. And if uploaders let Amazon sell their stuff via its subscription service, or via its rental store, Amazon will split that revenue 50-50. (Recode)

Amazon.com’s ambitions to take on YouTube won’t come cheap, though the company’s explosive growth already has enabled it to manage a growing video bill. (Wall Street Journal)