Contrary to rumors and speculation, Jeremy Clarkson's new car program is heading to Amazon.com's (NASDAQ:AMZN) Prime Instant Video and not Netflix.Former co-hosts James May and Richard Hammond will be joining Clarkson's new show, lending further cachet to the project and cementing the program as a valuable asset for Amazon's streaming service.
The end of an era and the start of something new
The much-loved, but undeniably controversial, Clarkson was booted from Top Gear after an incident in which he punched one of the show's producers. BBC's action was understandable given the circumstances, but the program's legion of dedicated fans loudly objected to the move, with a Change.org petition amassing more than a million signatures in favor of his reinstatement. Clarkson helped save Top Gear from near-cancellation in 2002 and gave the show a new direction that transformed it into one of the most popular entertainment programs in the world.
The 2013 edition of the Guinness Book of World Records listed the show as the most widely watched factual program in the world, broadcasting in 212 countries. Some estimates suggest that the show has as many as 350 million viewers. Given that much of the appeal of the program can be traced to its former lead host and his team, a Jeremy Clarkson show on Amazon Prime could be one of the biggest things in streaming video.
Why Amazon's teaming with Jeremy Clarkson makes a lot of sense
Per the terms of Clarkson's contract with the BBC, the TV personality was reportedly barred from involvement with programs produced by British companies that could compete with Top Gear. Most published speculation on where the old Top Gear gang's new show would wind up suggested that Netflix was the most likely fit, however, securing the project represents an even bigger win for Amazon and the platform of its streaming service should also allow Clarkson, Hammond, and May to deliver their signature style of humor and commentary, relatively unencumbered.
Amazon Prime Instant's direct distribution model eliminates the need for advertisers, which should make it an especially good fit for Clarkson, Hammond, and May's new program.
The dust-up between Clarkson and the Top Gear producer was far from the first public relations flare-up tied to the show, with the hosting teams' sly and politically incorrect style of humor creating numerous controversies. The Top Gear producer also wasn't the first person Clarkson made the press for taking a swing at, with the car lover having famously thrown a punch at talk show host Piers Morgan. While there is still be some risk for Amazon in teaming with the potentially volatile Clarkson, the possibility of losing advertising partners probably won't be an issue.
A winning combination?
Amazon's landing the new program from Clarkson, Hammond, and May represents something of a coup, and will likely establish the company's first major win in original content. While Prime Instant Video and Netflix have comparable selections of movies, the latter service has undeniably produced a stronger lineup of original programming, as none of Amazon's efforts in this sphere have caught on to the extent of Netflix's Orange Is the New Black or House of Cards. Now, Amazon has secured a key streaming asset that could have wound up in the hands of its main rival in the space, and one that could drive international involvement in the company's ecosystem.
While Amazon's revenue from its North American segment grew roughly 26% in the second quarter and accounted for about 60% of total sales, revenue in other territories grew just 3%. A Jeremy Clarkson-hosted automobile show is already a proven concept in international markets, and its widespread appeal could create huge value for Amazon. So far, Amazon Prime and its Instant Video service have been loss leaders used to bring consumers into the Amazon fold and put the squeeze on competition, but the new Clarkson, Hammond, and May show should be a valuable asset to that end even if the service itself remains unprofitable in the mid-term.
Amazon aims to dominate the retail space, and bringing users into its ecosystem with incentives like streaming video content and free two-day shipping is helping it achieve that long-term goal, even if Prime isn't currently profitable.
With one deft content acquisition, Amazon is now a legitimate player in triple-A original streaming content, and the company has improved the value of its Prime service for millions of potential subscribers.
Keith Noonan has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Netflix. The Motley Fool owns shares of Amazon.com and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.