Videonuze

Monday, November 24, 2014

Recently on Videonuze

  • Amazon Planning to Give Away Its Instant Videos With the New Kindle Tablet? Uh Oh.

    Catching up on my reading last night, I noticed toward the end of the first hands-on review I've seen about Amazon's forthcoming Kindle tablet something that could be very disruptive. According to the writer (so this is opinion, not fact), to support the Kindle tablet, Amazon plans to give buyers a free subscription to Amazon Prime.

    Of course, since last February Amazon Prime subscribers also gain access to Amazon's growing streaming Instant Videos catalog. So this would mean that Kindle tablet buyers would be getting lots of great video (and more to come) for no charge and presumably no ads either. If Amazon were to begin giving away high-value content as a marketing tactic supporting its devices, it could fundamentally change the game for everyone.

    For Netflix in particular, this could be a very troubling scenario, given Amazon's size and scope. Last year Amazon's revenue of $34 billion was 15 times Netflix's $2.2 billion, and its profit of $1.1 billion was 7 times Netflix's $161 million. If Amazon adopted a proactive strategy of giving away content (on top of the shipping benefits of Prime) while also investing in competitive content, then this would be a direct strike to Netflix. To take things one step further, what if Amazon succeeded in acquiring Hulu and then offered some (or all?) of Hulu.com free content and all of Hulu Plus's content as a benefit to Kindle tablet buyers? This scenario makes an Amazon play for Hulu much more strategic and would really mix things up.

    Given that nobody (Samsung, HP, Dell, Acer, etc.) has yet been able to put a dent in the iPad's dominance, Amazon clearly knows what's ahead to succeed. To get a foothold, Amazon is going to have to be incredibly aggressive and according to the review, "Amazon is going to promote the hell out of this thing on Amazon.com." In this context, spending hundreds of millions on content to support the Kindle tablet isn't a crazy idea, especially given the size of the market opportunity and Amazon's vast resources. Apple's own playbook of using iTunes to support its devices shows how effective this could be.

    There are still a lot of unknowns here, but Q4 could well be another period of tumult for video and various ecosystem players depending on what Amazon decides to do.
     
  • Akamai - full banner - 9-17-14