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Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

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Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#31
post #13
post #7

Personally, my use of Prime is significantly different than Netflix. I've rarely used Prime free content, but I have rented a number of recent movies and "bought" a few recent seasons of TV shows. Off the top of my head, Amazon has collected more cash from me for video streaming in the last 6 months than Netflix, but I've been consuming probably 10x more data from Netflix. I wonder if / how Hastings comparison accoun…

Reed's point is, I assume, that Amazon is paying/will pay approximately $1B to license content for prime streaming, not ppv content. Is the availability of prime streaming a factor in you choosing Amazon PPV vs, say, Apple?

>Reed's point is, I assume, that Amazon is paying/will pay approximately $1B to license content for prime streaming, not ppv content.

That's the thing...

I don't see how Hastings would have any way to separate the two considering Amazon content can be both.

For example, anyone can rent RAN for $2 or buy it for $10 while Prime subscribers can stream it free. Of course, you can also buy a half a dozen physical formats from Amazon as well.

Netflix is a completely different service.

Therefore, I wonder how relevant Reed's "They outbid us and we bid X" assessment of Amazon's costs could be.

Obviously, he's far from certain with the half a billion dollar spread present in his estimate and all.

>Is the availability of prime streaming a factor in you choosing Amazon PPV vs, say, Apple?

I imagine it's a combination of several things...

1) I've been a Prime subscriber for 6 years and Amazon has never let me down in terms of service at any level. 2) I've had a few Apple devices over the years, but never bought into the ecosystem at all. 3) It's only recently (3 or 4 years) that I've really bought into digital goods at all. I have a bunch of music on Amazon MP3 and they started pushing the video service right around the time I outfitted my house with a bunch of Rokus.

1: http://www.amazon.com/Ran/dp/B0037EAJAC

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#32
post #27

"Hastings says Amazon is losing between $500 million and a $1 billion a year as it acquires streaming video content rights." I flat out ignore estimates like this. A sway of a few percent, sure...but 500 million to a billion is laughable at best.

500 million to a billion is on the same order of magnitude. Seems reasonable to me.

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#35
post #27

"Hastings says Amazon is losing between $500 million and a $1 billion a year as it acquires streaming video content rights." I flat out ignore estimates like this. A sway of a few percent, sure...but 500 million to a billion is laughable at best.

500 million to a billion is on the same order of magnitude. Seems reasonable to me.

500 million to 1,000,000,000 is a laughably fantastic estimate.

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#36
post #3

It's ok, they'll make it up in volume. I'm only half joking, the fact that PRIME is part of their retail sales program means that they do make more sales to PRIME members. If their deals for content are cheap enough, it could work without significant changes... eventually. I'm just amazed that they are able to do this for so long. Their P/E (in profitable quarters) is astronomical.

Their P/E is astronomical because their business model is based on buying market share. If you don't think that's a valid strategy, you don't invest in AMZN at all.

Would that it were true that you could simply compare tech companies by P/E to get a read on how "jazzed" the market is about a company, but Amazon and Apple are great illustrations of why you can't.

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#37
At least Amazon prime streaming works on Linux (if Flash can be called "working", but at least it's better than the abomination called Silverlight).

The only reason why I still use Netflix is that fact that I get a MacBook from work (didn't get a choice in that matter)... And even then I am considering canceling the streaming subscription.

I don't get Netflix... Or maybe I do. Isn't their CEO on the Microsoft board?

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#38
post #8

> Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video I'm skeptical. This posits that Amazon is spending about 1/4-1/2 of what Netflix spends (Netflix on track for $2.1 billion this year), to stream about 1/20th as much (Netflix 33% of internet traffic, Amazon 1.8%), from a greatly inferior content catalog. I think Bezos & Co. can cut better deals than that.

thats 33% of US internet traffic and not worldwide?

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#39

At least Amazon prime streaming works on Linux (if Flash can be called "working", but at least it's better than the abomination called Silverlight). The only reason why I still use Netflix is that fact that I get a MacBook from work (didn't get a choice in that matter)... And even then I am considering canceling the streaming subscription. I don't get Netflix... Or maybe I do. Isn't their CEO on the Microsoft board?

Reed Hastings announced he is not seeking re-election from the Microsoft board after this year [1].

[1] http://techcrunch.com/2012/10/09/reed-hastings-wont-be-retur...

Re: Netflix CEO: Amazon Losing Up to $1 Billion a Year on Streaming Video

#40
post #33

I loved how the spokesman turned around the negativity in one swoop. From "Amazon's losing money" to "it's right that Prime Instant Video is an amazing value for customers."

The technique of answering any question with a positive is also extremely useful in job interviews or sales.
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