Amazon.com, Inc. (NASDAQ:AMZN) didn’t just arrive on the Content scene, it landed with a thud so loud that it sent out vibrations all around the television industry. The success of its TV show Transparent was the highlight of Golden Globes.
In an interview on CNBC, Roger McNamee of Elevation Partners explained why content is so crucial for Amazon.com, Inc. (NASDAQ:AMZN). Jon Fortt brought home his point and summarized how content could be the much needed treasure trove for the e-commerce player.
“[…] When you look at Amazon.com, Inc. (NASDAQ:AMZN) it is a $135 billion market cap give or take. Netflix $19 billion, o.k. So, different kind of scale of what good streaming does for you and the purpose of Prime content on Amazon is to get people to actually buy the non Prime content, to get people into the ecosystem , similar to the hardware purpose . This is an expense similar to shipping […],” said Fortt.
Amazon.com, Inc. (NASDAQ:AMZN) offers its Prime service, which includes discounted and faster shipping for its members, who pay an annual fee of $99. Amazon Instant Video is a free service for Amazon Prime members, and this is how the chain reaction that McNamee mentioned works. Luring the subscribers with the content and then enticing them with cheap products with fast delivery.
However, it still remains to be seen exactly how profitable this turns out to be for Amazon.com, Inc. (NASDAQ:AMZN), since now it is merely an expense. An expense that could potentially generate considerable amount of revenues given its high quality.
Amazon’s CEO, Jeff Bezos seems to be pretty sure that this move is going to work and has in fact signed Woody Allen for his first ever TV series, which will both be directed and written by him. The e-commerce player has interesting times ahead.
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