Amazon Covers Many TV-Video Bases. What's The Downside?

Amazon wants no entertainment stone un-turned -- different entertainment services, platforms and even devices.  Is this all about gaining a wide-range entertainment shelf space market share?

Already well into the OTT platform business with Amazon Prime Video for premium TV shows and other content -- as well as the device industry with its array of Amazon Fire products -- now Amazon is moving to user-generated YouTube-like platform, Amazon Video Direct.

Will this new service make any headway? That doesn’t seem to be the key issue.

Any of these entertainment business don’t seem to be big concerns  in the short term anyway. Not when Wall Street continues to value the company at record levels.

Content uploaders for Video Direct can earn royalties of 15 cents per hour streamed in the U.S. and 6 cents in other territories -- for a subscription only, no advertising delivery. Revenue is capped at $75,000 per year.



And those choosing the advertising option can receive a 55% share in ad revenue -- that might be the liking of bigger media companies. Initial Amazon Video Direct deals are with the likes of Conde Nast Entertainment, HowStuffWorks, Samuel Goldwyn Films, the Guardian, Mashable.

Amazon hasn’t been alone in trying to take on YouTube. Other recent competitors have included Vessel and Vimeo -- all looking to offer better revenue splits with creators.  For example, YouTube’s standard revenue-sharing agreement, gives content owners 55% of ad money; Vessel, 70%; with Vimeo pledges to pay 90% of transaction fees back to partners.

Amazon Video Direct comes off not so different at YouTube -- in terms of its advertising split -- offering the same 55% of ad money to creators. The subscription, no-advertising formula is somewhat different.

YouTube, according to estimates, pulls in around $2 billion in net advertising dollars. While a nice chunk of change, this doesn’t seem to be Amazon’s specific short-term goal. It typically looks to get into businesses slowly -- like with books and other retail areas -- and then gradually grabs higher market share.

In the entertainment arena, Amazon now compete with Netflix with Amazon Prime Video. Amazon Fire? Tablet makers and streaming media players rare competitors. Now it looks to take on YouTube.

What’s next -- traditional TV, movies, music?

1 comment about "Amazon Covers Many TV-Video Bases. What's The Downside?".
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  1. Stan Valinski from Multi-Media Solutions Group, May 15, 2016 at 4:48 p.m.

     Great take Amazon. You describe their short term goals to perfection. Bezos certainly is maintaining a very high batting average  executing the strategy.

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