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Amazon’s Echo Chamber

dcurt.is

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Re: Amazon’s Echo Chamber

#51

Post by dcw303 »

I agree that their strategy is broken, but don't believe it's due a lack of taste.

I understood Amazon's hardware to be the opposite of Apple. Cupertino makes their profit on hardware mark up, so it makes sense that everything you buy on iTunes is as cheap as possible - standard complementary products theory. Since Amazon has primarily got their (marginal) profits from selling you content, it made sense that their ebook readers, phones, and tablets are cheap.

I don't get the Kindle Voyage. Premium priced hardware doesn't fit into their model. And now the Echo. I can't even guess how they think they will make money with this thing, or how it could generate more sales anywhere else in the org.

Re: Amazon’s Echo Chamber

#52

Post by nikcub »

There are a few ways of thinking about Amazon, here is one: they can invest back into new products in the same way Google do but at a larger scale since they don't have the pressure of returning profits to shareholders and Amazon's distribution and infrastructure is more likely to be complementary to followup hits than Google's search ad business.

In this hit based model, they can afford more than a few misses and they have already had plenty of hits (AWS, Kindle).

As an investor your question is: would you rather Amazon invest $50-300M trying things out with the advantage of their brand, position and infrastructure - or do you want them returning that money, pay tax on it only for you to have to find somewhere else to park it?

> No one makes money selling media for consumption anymore.

This couldn't be further from the truth. Cable is dying and tech and media companies are currently running a multi-billion dollar race in working out who will own whatever platform is next (Amazon buying streaming rights, building tablets and phones etc. is part of their version of what they hope next platform will be - winner(s) take hundreds of billions in market cap).

It is so untrue that as soon as Time Warner dropped their print and cable businesses Murdoch offered $85 billion for the content business that remained and they turned him down.

Re: Amazon’s Echo Chamber

#54

Post by michaelbuckbee »

girvo wrote: post #39
IBM wrote: post #31

Earlier quoted context omitted.

The author is talking about Amazon's share in those profits. It's clear that people who own the IP make a lot of money in media content.

Which is exactly why Netflix for example is moving into content production. Does amazon do the same?

Amazon has a number of self-produced shows. Also, they have an interesting "pilot" season where they put out the first episode of a half dozen or so shows and then let people vote on which one get produced into a full season.

The quality of them is on an uptick as well. 'Transparent' has been getting a good deal of critical attention and 'Tumbleleaf' an old school by hand stop-motion animated production is just incredibly high quality.

Re: Amazon’s Echo Chamber

#55

Post by fidotron »

The danger here is actually being so far inside the tech echo chamber you can't see that they have an audience that really are buying their stuff. Yes, the Fire Phone is a misfire, but they have built an incredibly valuable high spending audience with the other Kindle devices.

Re: Amazon’s Echo Chamber

#56

Post by arjie »

Loved the Kindle from the beginning. Cheap plastic is part of its advantage. I take it places without the least fear for its safety. Cheap is good here.

Re: Amazon’s Echo Chamber

#57

Post by charlesju »

This is why it makes sense.

There are a LOT of people that use Amazon to buy things.

A lot of people don't know the difference between phones.

If Amazon has a giant splash screen saying it has a phone, naturally people will buy it just because they don't know any better (eg. 65 yr old Grandmas in Arkansas).

Additionally, Amazon is a long term company and they know that if they want their foot in the phone game they need to start somewhere so they did.

They have never cared about hardcore techies or even their investors. They are one of the most long term focused companies alive right now. They believe in iteration like a religion and they understand the average consumer.

It makes sense because it will make cents.

Re: Amazon’s Echo Chamber

#58

Post by MarkMc »

I don't see why the the author finds it 'extremely hard for me to understand Amazon’s consumer hardware strategy'.

The strategy is simple: If 100 million people only have an Amazon device (and do not have a Google or Apple device) and one of those people wants to watch the latest James Bond film or English Premier League final, then Amazon can take a 30% cut of the price the user (or advertiser) pays.

Amazon's execution may fail because their hardware is crap and are losing to Android and Apple, but their idea is sound.

Re: Amazon’s Echo Chamber

#59

Post by adamc »

MarkMc wrote: post #58

I don't see why the the author finds it 'extremely hard for me to understand Amazon’s consumer hardware strategy'. The strategy is simple: If 100 million people only have an Amazon device (and do not have a Google or Apple device) and one of those people wants to watch the latest James Bond film or English Premier League final, then Amazon can take a 30% cut of the price the user (or advertiser) pays. Amazon's execut…

There will never be a 100 million if the hardware is too crappy, and that's why the strategy is hard to understand; you can't just assume the end point.

That said, Amazon's phone is the only product I thought made little sense. The Kindles are successful and drive ebook consumption. Fire TV I have no idea, but the Roku has proven that the basic idea has a market. What other giant hardware stumbles has Amazon launched?

Re: Amazon’s Echo Chamber

#60

Post by ctdonath »

swartkrans wrote: post #10
hkarthik wrote: post #7

Scathing and harsh, but probably pretty accurate. > No one makes money selling media for consumption anymore. That market is quickly and brutally dying. The media market is now so efficient that all profit is completely sucked out of the equation by the time you get to the consumption delivery system, to the point that it is barely possible to break even. This part resonated with me a lot. The media market was always…

I like the post and agree with dcurtis about the abysmal phone. However I like my Fire HDX. It works for what I want to use it for: reading books and watching stuff. It isn't the best tablet, but it is not bad. It's the best for buying books and videos from Amazon. Ecosystem is subpar, but that is ok.

It isn't the best tablet, but it is not bad. ... Ecosystem is subpar, but that is ok.

My, what a ringing endorsement.

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