Deeper Dive—The big difference between Netflix and Amazon Prime Video on Comcast

Amazon Prime Video will soon be available on Comcast's X1 cable box. (Comcast)

Comcast unveiled another big-deal streaming integration this week when it added the Amazon Prime Video app to its X1 platform. But Amazon’s presence on the X1 is quite different from SVOD rival Netflix’s.

Comcast is integrating Amazon Prime Video on the X1 so Prime members can access the service from their Comcast cable boxes. But they’ll need to sign up for Amazon Prime elsewhere because Comcast won’t be selling or handling billing for Prime—at least not when it launches on the X1 later this year. Comcast customers can however sign up for a standalone Amazon Prime Video monthly subscription through the app launching on the X1.

Netflix got a much different deal from Comcast. Since Netflix launched on the X1 back in 2016, new Netflix customers have been able to sign up for Netflix directly on the X1 and have the service added to their Comcast bill. Earlier this year, Comcast and Netflix expanded their agreement so Comcast could offer Netflix as part of available Xfinity packages.

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Comcast and Amazon could change their agreement in the future. But for now, Amazon Prime Video is simply an app integration, and that likely has a lot to do with how different Netflix and Amazon are.

Netflix—though it’s functioning at a rate of content production practically unmatched anywhere—is basically a premium channel like HBO or Showtime. Netflix is a complementary add-on to a traditional cable channel bundle.

Amazon also has a substantial library of licensed and original content like Netflix. And though Amazon has said many times that it doesn’t want to compete directly with or replace traditional TV, it has Amazon Channels: a simplified way of subscribing to multiple direct-to-consumer services like CBS All Access, HBO, Showtime and Starz, and accessing them all through a centralized experience.

Like it or not, that is competitive to video services that pay TV operators like Comcast sell. But, despite any perceived competitive differences, Comcast and Amazon have worked out a deal. So now the questions become: Why did it take so long, and how will they both benefit?

Prime Video is joining the X1 party nearly two years after Netflix and after YouTube already found its way in. Alan Wolk, co-founder and lead analyst at the consulting firm TV[R]EV, said any delay in an integration deal between Amazon and Comcast was likely due to contractual hurdles and not technical issues.

“I assume that each one wanted something different out of this,” Wolk said.

It’s unclear what the financial terms of the deal were but for Comcast, the announcement reconfirms the company’s commitment to making the X1 into an all-in-one entertainment platform.

“We want to give customers easy access to all their favorite content in one place. X1 continues to be a platform that can curate live TV, On Demand movies and shows, and streaming internet video and music titles into one, easy-to-use, seamless experience,” said Dana Strong, president of Consumer Services at Comcast, in a statement.

Wolk said he was surprised more pay TV operators like Verizon and Charter don’t make bigger deals out of streaming service integrations on their platforms, but seemed unsurprised that Comcast was the first U.S. MVPD to add Prime Video.

“Comcast has been leading the way in innovation among the MVPDs for a while now,” Wolk said.

Amazon could likely see more of these deals happen now that Comcast is on board. When Comcast first integrated Netflix in 2016, it sparked a lot of conversation in the pay TV space. Comcast wasn’t the first pay TV operator to integrate Netflix, but it certainly was the biggest, at least in the U.S.

For Amazon, the Comcast integration could lead to an increase in viewership and engagement on Prime Video. Amazon Studios recently had a big shakeup in its TV division—Amazon Studios chief Roy Price left amid sexual harassment allegations and was replaced by former NBC entertainment president Jennifer Salke. Wolk said the new Amazon Studios leadership is looking to make programming that’s more mass market and tapping into Comcast’s more than 22 million cable subscribers is a good way to reach a bigger audience.

Both Amazon and Comcast can clearly benefit from this new partnership but, for the time being, the two companies seem to be still maintaining some distance.

This article was updated to clarify that Comcast customers can sign up for the standalone Amazon Prime Video monthly subscription, but not Amazon Prime, through the X1.