What do the Golden Globe wins really mean for Amazon.com?

Discussion
Jan 16, 2015

"To Amazon, my new best friend."

Those words were spoken by Jeffrey Tambor on Sunday after he took home the best actor award at the Golden Globes for "Transparent," a dark comedy produced by Amazon. The series also won for best television comedy.

Amazon followed its first Globe win on Tuesday by signing Woody Allen to write and direct his first television series.

To some, the coups are a sign that Amazon is becoming a bigger threat to Netflix and Hulu, which are also both aggressively investing in original content.

Edie Falco, who stars in Showtime’s "Nurse Jackie," remarked to reporters at the Globes, "The stuff that I’ve been watching lately has been on [streaming services] like Amazon Prime, where I used to go to get my toilet paper."

Indeed, a few articles explored what it means for sales of toilet paper and other items on Amazon.com.

Prime Instant Video is included in the company’s $99-a-year Prime service, which offers two-day shipping at no extra charge. Also offering unlimited music and photo storage and free e-book rentals, Prime is believed to be the primary tool Amazon uses to hook consumers. After joining Prime, users spend two to three times more, according to estimates.

Last year, many pointed to the bundling of content with shipping perks as the way Amazon would encourage customers to accept hikes in membership fees.

"Prime isn’t just a two-day shipping program anymore," Brad Stone and Joshua Brustein wrote for Bloomberg BusinessWeek last March after the Prime subscription was raised from $79 to $99. "It’s become a varied loyalty program that draws customers in and seeks to convert them into Amazon addicts."

Amazon also has a hit with Garry Trudeau’s Washington satire "Alpha House," now in its second season, and last month released another highly praised comedy, "Mozart in the Jungle." Joining other coming projects with acclaimed directors including Steven Soderbergh, Ridley Scott and Carlton Cuse, the signing of Mr. Allen was another sign of Amazon’s commitment to original programing.

"Amazon needed to prove they were a serious player in television because there was always kind of a question mark of how real are they," Eric Deggans, the TV critic at National Public Radio, told the Globe and Daily Mail. "They won two Golden Globes and with this now, they’re stepping up."

What does Amazon’s success developing original streaming content mean for the core retail side of the business? Should retail competitors be looking to develop original programing as well?

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11 Comments on "What do the Golden Globe wins really mean for Amazon.com?"


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Chris Petersen, PhD
Guest
7 years 5 months ago

Definitely what Stone and Brustein said: “Prime isn’t just a two-day shipping program anymore.”

Omni-channel isn’t just how consumers buy for holidays. It is becoming how they consume everything, anytime and everywhere—especially media.

But to be credible in delivering both media and original content, Amazon needs some tangible credentials—so yes, winning the Golden Globe awards is a very big deal.

If high-quality streaming content is yet another reason to buy Prime, there is a definite spillover effect in shipping advantages for buying everything from TVs to toilet paper.

Max Goldberg
Guest
7 years 5 months ago

The theory is that access to original content adds so much to an Amazon Prime subscription that more consumers will want to buy it, and once they are subscribers they will by two to three times more products from Amazon. If this is true, Amazon has a smash hit on its hands.

Few other retailers could afford to create original content. I have to wonder if Amazon can afford it. The company continues to hemorrhage money in the name of acquiring customers.

As an Amazon shareholder, I have to wonder when Bezos’s various strategies will generate profits.

Ed Dunn
Guest
7 years 5 months ago

Amazon streaming is leveraging their cloud computing infrastructure more than retailing. I do not expect Macy’s or Target to give me a free video streaming service with original content to compete with Amazon.

However, retailers are making a mistake not taking advantage of streaming content. For example, using the stores to broadcast the international the release of a new line of products and invite the general public—video streaming can accomplish this. On-demand video of showcased products with demonstration videos is also another opportunity for retailers to explore.

Carol Spieckerman
Guest
Carol Spieckerman
7 years 5 months ago

Amazon’s foray into original programming marks another grab-market-share-and-worry-about-profits-later move for the platform. Amazon’s got the eyeballs—how or where is it going to make the money required to keep them? Wooing creators like Woody Allen for its next line-up won’t come cheap. Increasing Prime membership fees (again) won’t fly and viewers probably won’t take kindly to Amazon breaking up their binge-watching sessions with advertising intrusions. Scale sans profits. How long will it work?

Doug Garnett
Guest
Doug Garnett
7 years 5 months ago

This is a “me-too” win for Amazon. Netflix has already proven that niche drama that won’t work on TV can be distributed through streaming. And that kind of drama is classic award show fodder—what one would expect to the win awards. But dramatically significant? Not really.

Lee Kent
Guest
7 years 5 months ago

With award winning programming, this gives the consumer yet another reason to make Amazon their first stop. So, is it a smart move? Yes, if they are actually making money.

As for other retailers? I definitely think there are streaming opportunities for many of them, however, I do not think it wise to invest in developing expensive programming if you are say, Macy’s. It’s all about what your customer expects from you and your brand.

For my 2 cents.

W. Frank Dell II, CMC
Guest
7 years 5 months ago

Amazon is getting into everything from drone deliveries to making movies, yet does not make a profit. It seems more like a rich kid playing with toys no one else has, than a company. Amazon Prime is nothing more than a membership fee, like what Costco or Sam’s charge. Giving away free movies will not turn a profit for shareholders.

Amazon did well with digital books, but lost to Apple for the equipment to read them. Making movies has no meaning for retail and competitors should look no further. It is tough enough to make a profit in retail and the majority of movies lose money, so it is not a good combination.

J. Kent Smith
Guest
7 years 5 months ago

There’s some synergy with the retail side insofar as it can be linked with merchandise (just as Hollywood does with their movies), but how big that will be is an open question—and probably not huge. It’s more about owning the space in the consumers head that Amazon is the place to go for anything, beyond any direct profit motive.

The bigger question is around how old school cable is going to respond. As for other retail competitors getting into it…this is a hard one to imagine. Perhaps the specialists can have a role (REI, I suppose), but it’s likely a giant leap from a cost and capabilities perspective that companies forced to earn profit each quarter.

Kenneth Leung
Guest
7 years 5 months ago

I think it helps because if people are paying for Amazon Prime for streaming content, they are more likely also to use the free shipping for shopping. I think Amazon’s business model is to be a product and services business for both B2C and B2B, retailing just happens to be a piece of it that they do well. For other retailers, developing originally programming would not work since it isn’t part of core competency, better off doing media placement in existing programming for better ROI.

Joan Treistman
Guest
7 years 5 months ago

Retail competitors may not have the capacity to develop original programming.

There is an opportunity and indeed a need to develop new approaches for generating awareness for their stores and products. New forms of programming and channels will impact how consumers learn about brands, stores and services. I think that’s the first order of business for retailers within the context of Amazon’s original streaming success.

Shep Hyken
Guest
7 years 5 months ago

Amazon’s jump into the world of TV shows that the entire broadcast model has been “turned on its ear.” Look at the great programing coming from independent networks. And, how about NetFlix original programming? Some of the top shows. Basically, Amazon is creating its own channel with a pay as you play or membership/subscription model. You don’t have to be in Hollywood anymore to create hit movies and shows.

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