Amazon Prime Instant Video To Debut Internationally; Morgan Stanley Expects A Strong Roll-Out

According to a report in French newspaper Le Figaro, Amazon.com, Inc. AMZN intends to simultaneously launch the Prime Instance Video platform in Italy, Spain and France before the end of 2016.

Morgan Stanley’s Brian Nowak maintains an Overweight rating on the company, with a price target of $800.

High Expectations

“If AMZN's video success in UK/Germany is any indicator of what's to come — over 30 percent of people sign up for Prime because of video — this is likely to lead to faster Prime and GMV growth, as AMZN is ~1 percent penetrated in these markets,” Nowak mentioned.

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Although Amazon has not made any public statement regarding a potential launch, the French newspaper indicated that a representative from the company had started to “float the concept” with local parliamentarians.

Success Outside the U.S.

“We are bullish about this potential roll-out as we believe Amazon's Prime Instant Video is a growing driver of Prime subscriber growth…in particular outside of the US,” Nowak noted.

The analyst also mentioned the AlphaWise survey data indicated increased Amazon Prime awareness and retention across the countries in which it has been launched.

According to the Morgan Stanley report, “We think one of the reasons for the outsized success of Instant Video outside of the US could be lower pay TV penetration and willingness to spend on media in Europe compared to the US.”

Nowak believes increased Amazon Prime subscription growth in Italy, Spain and France would drive faster and more sustained international gross merchandise value growth for the company.

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