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Many people will write clever things about Amazon’s strategy with Metro-Goldwyn-Mayer, the film studio that Amazon said buy for $ 8.45 billion. But I want to ask a more basic question: Why?
Not why Amazon buys Amazon MGM which owns the rights to James Bond and ‘RoboCop’. Presumably Amazon will use it to my ideas for fresh series and movies for its Prime Video streaming entertainment service. No, I’m asking: Why does Amazon have a streaming video service?
Is video a valued benefit for Prime members or a million-dollar vanity project for Amazon?
In the rare cases that Amazon executives discussed their goals for Prime Video, they focused on the power of loyalty. They say that the inclusion of a video service in Prime is another reason for people to stick to Amazon’s membership program and feel like they get good value from both package shipments at no extra cost and ‘Bosch’ on request. My colleague reported that households with Prime membership typically spend $ 3,000 a year on Amazon, more than twice as much as households without the membership spend, according to Morgan Stanley.
Amazon said that people who use Prime Video are more likely to renew or pay for their membership annually if they have free trial programs, and they buy more products at Amazon. But in his new book on Amazon, journalist and author Brad Stone suggests that this may not be entirely true.
He writes that some Amazon employees who worked in the entertainment department analyzed how many Prime members watched programs and then extended or enrolled their Prime membership. “There was little evidence of a link between viewing and buying behavior,” Stone writes. ‘The truth was this: Bezos wanted Amazon to make TV shows and movies. ”
The divergence between the stated goals of Prime Video and the perhaps more pedestrian reality emphasizes a dichotomy of Amazon and other technological superpowers. They are so rich and successful in some areas that they can afford them in others.
Amazon’s success with online shopping and cloud computing – and, more importantly, the belief among fans and opponents that the company is a powerful and disruptive genius – has stripped Amazon of its dubious strategies in groceries and streaming. And it has reduced the urgency of solving a clumsy online shopping experience that we can not always trust and that feels like it has not been updated since the 1990s.
Facebook and Google’s very lucrative advertising businesses promote their inability to figure out what to do with … well, almost all the other things that those companies are involved in, including Facebook’s struggling to turn WhatsApp into a business and Google’s years of struggle with online shopping. I do not know if I want to find it comforting or scary that these companies are crazy at the same time and sometimes stumble into the dark.
In Prime Video, we do not hear that Amazon executives justify the cost or give its value to Prime members. The lure of fast and free shipping may be sufficient. Or would Prime members be more loyal if the company offers various benefits, such as free internet service, online fitness classes, access to personal shopping or more Kindle books? Walmart’s version of Prime gives discounts at some gas stations.
I do not know if one of these is compelling alternatives, but I also do not know that video is an attractive addition to Prime. Only Amazon really knows this it is not eloquent.
There is a chance that Amazon is playing a very long game with Prime Video. I can imagine a future in which Amazon uses ads on Prime Video and its other online video sites to get us interested in new products and then sell them to us. Amazon will include the entire lifespan of shopping, from ‘huh, it looks interesting’ to ‘buy’. (Stone suggested the possibility in a recent newsletter.)
Or maybe I fall into the trap of assuming there has to be a great design behind what Amazon and other superstar businesses do. Maybe making movies is just a little cool.
Before we go …
This year in India is a series of internet benefits. On Wednesday, Facebook-owned WhatsApp sued the Indian government over new Internet rules requiring “traceable” messages that, according to WhatsApp, violate India’s constitution. Prime Minister Narendra Modi’s party also took to Twitter to add a warning label to the tweets of party leaders, containing forged documents intended to smear opposition politicians.
Related: Russia presses Google, Twitter and Facebook to paste posts that the government considers illegal or to repair material for the Kremlin, reports Adam Satariano and Oleg Matsnev. As with India, Poland and Turkey, Russia’s campaign is an example of how governments are testing how far they can go to control online speech.
The zeal of cyber security to promote their services has warned criminals. A ProPublica investigation found that cyber security firms, by disclosing bugs in criminal gang software, could unknowingly contribute to ransomware attacks, including the one that recently hit the East Coast’s largest fuel pipeline.
Artificial intelligence software is not smarter than humans but … machines did beat archaeologists in the tedious task of categorizing pottery columns, my colleague Heather Murphy wrote.
Hugs on this
Otters in a hot bath. (OK, it’s actually more like a cold pool, but this webcast of otters was included in the “hot tub” category of Twitch.) Read more van Veelhoek about this marine mammal rescue center in Vancouver and its live stream on Twitch.
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