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Amazon’s Echo Chamber

dcurt.is

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Re: Amazon’s Echo Chamber

#71

Post by firebones »

blobbers wrote: post #64

Although the author is a bit harsh, I tend to agree with him on the aspect that Amazon is largely creating second rate products and ultimately wasting a lot of shareholder money (their inventory write down on fire phone inventory was $170M). The markets have been punishing them for their tactic of throwing it against a wall and seeing if it sticks. Ultimately, I think what allows a company like Apple to get ahead was…

How expensive are these bets, in reality? To me, they seem like long options. Minimal downside, but huge potential upside as they learn from each mistake and gradually improve and create more exposure to the potential of a hit.

But in reality, it's not the hits that Amazon counts on--it's the recurring revenue of Prime and Unlimited subscriptions and loyalty around lots and lots of low-margin purchases. To keep those memberships coming, you don't need to be a hit machine--you just need to keep offering incremental useful value, mediocre as it may be alone, to add value to the subscription.

I think that's the angle. It's not that Costco hot dogs are the best hot dogs in the industry for $1.50 (or $4.99 rotisserie chickens, or car buying services, etc.), it's just that these items add enough value to enough peoples' Costco experience that they renew memberships and spend a lot of cash on low-margin stuff.

Re: Amazon’s Echo Chamber

#72

Post by mcpherrinm »

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?

http://studios.amazon.com/

Re: Amazon’s Echo Chamber

#73

Post by pgodzin »

nikcub wrote: post #52

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 th…

> 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

Can you elaborate on this? Google tries plenty of "moonshots" that may never return profits to shareholders

Re: Amazon’s Echo Chamber

#74

Post by sidcool »

I absolutely disagree with the Amazon Fire phone being terrible. It's not the best in the market, but not terrible at all. Very harsh judgement on the part of the OP. I even suspect a malicious motive behind all the vitriol spewed against Amazon.

Re: Amazon’s Echo Chamber

#75

Post by r00fus »

schwabacher wrote: post #8

Echo seems really smart to me - the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs', or 'hey siri, i need a new pair of socks' becoming the way people shop for things online. Amazon made Echo for 'alexa, order me wheat thins', and all the question answering and music playing is just window dressing.

> the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs'

If that's the case, they should worry about Google Shopping Express and same-day delivery vs. 2-day after it's shipped. When Google does roll it out to most US metros, they likely are going to add it as an option to "Ok Google". And in a few hours, your order will be on your doorstep.

I mean, Amazon's delivery chain is absolutely amazing, but it simply can't compete with local delivery.

Re: Amazon’s Echo Chamber

#76

Post by nikcub »

pgodzin wrote: post #73
nikcub wrote: post #52

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 th…

> 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 Can you elaborate on this? Google tries plenty of "moonshots" that may never return profits to shareholders

I meant that Amazon are doing the same as Google. They have similar revenue, Google has twice the margin but is banking $10B+ p.a while Amazon spend all and beyond. They are both maneuvering to capture these new markets using their existing advantages.

For some reason Google investing in projects makes a sense for a lot of people, while for Amazon it doesn't even though it has produced business lines outside of their main that have more revenue and margin than anything Google have done.

Re: Amazon’s Echo Chamber

#77

Post by vidarh »

rhino369 wrote: post #35
patio11 wrote: post #25

Earlier quoted context omitted.

No one makes money selling media for consumption anymore. This is a common belief among people in tech. It is also disastrously false. Frozen has sold 1.2 billion dollars worth of tickets. The related IP alone, to say nothing of merchandising, will be sold for decades to come, and bring in additional billions. You know the DVD, a dead format that can be trivially pirated? Yeah, they sold 3.2 million copies of Frozen.…

The author doesn't mean media isn't profitable, but media retail isn't profitable. The author is somewhat right. It's only profitable when you have a walled garden that you control, so you can squeeze markup out of the supplier.

> The author doesn't mean media isn't profitable, but media retail isn't profitable.

Meanwhile HMV, the UK chain that used to be #1 in music and DVD sales before going into administration a year ago, is now rapidly expanding again (as in: adding more retail outlets) [1], and looks set to overtake Amazon in media sales if growth continues at the current pace. While they posted an overall loss, most of that is one-offs related to the restructuring, and all their stores are reportedly now profitable and they reported 17 million in operating profits.

If you'd asked me a month ago, I'd have said the same. Now I'm not so sure.

[1] http://www.cityam.com/1411962291/hmv-returns-profit-hilco-re...

Re: Amazon’s Echo Chamber

#78

Post by vidarh »

r00fus wrote: post #75
schwabacher wrote: post #8

Echo seems really smart to me - the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs', or 'hey siri, i need a new pair of socks' becoming the way people shop for things online. Amazon made Echo for 'alexa, order me wheat thins', and all the question answering and music playing is just window dressing.

> the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs' If that's the case, they should worry about Google Shopping Express and same-day delivery vs. 2-day after it's shipped. When Google does roll it out to most US metros, they likely are going to add it as an option to "Ok Google". And in a few hours, your order will be on your doorstep. I mean, Amazon's delivery chain is…

> they should worry about Google Shopping Express and same-day delivery vs. 2-day after it's shipped.

I'm sure they do. And I'm sure something will happen in the US too. Meanwhile in the UK, Amazon has started rolling out their own delivery depots to complement their large warehouses, and leaving partners to do local delivery from their depots instead of the full end-to-end delivery.

Recently they announced that as a part result of this, they've signed a deal with a retail magazine distributor to deliver your packages to local shops etc. for pickup.

Not quite Google Shopping Express - yet - but it means that you can shortly get your packages in ~12 hours nearly UK wide, from an inventory my local stores can't compete with, because they're constrained by the cost of retail space.

> I mean, Amazon's delivery chain is absolutely amazing, but it simply can't compete with local delivery.

Most of what I've ordered from Amazon over the last year isn't available from local shops. A lot of it isn't even available from Amazons UK warehouses, and end up getting drop-shipped from other parts of the world. That's what stops me from going other places: Amazon aggregates a whole lot of sources that extends the products available to me far beyond what a service that aggregates local companies can.

And I bet that following the rollout of their local depots, they'll start predictively moving stock of their best selling products ahead of time to cut times further. Especially since the more they push through those depots, the more flexibility they will have in route scheduling for the last leg delivery to cut delivery times even further.

Re: Amazon’s Echo Chamber

#79

Post by vidarh »

cwyers wrote: post #47
schwabacher wrote: post #8

Echo seems really smart to me - the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs', or 'hey siri, i need a new pair of socks' becoming the way people shop for things online. Amazon made Echo for 'alexa, order me wheat thins', and all the question answering and music playing is just window dressing.

Almost everyone who would be in the market for this kind of a device already has something in their pocket with access to Google Now or Siri, though. Why use Echo when you have to be in a certain room?

Because when you're in that room you don't need to get your device out of your pocket?

But I don't buy that almost everyone will have it in their pocket, given the number of times I see people looking for their phones all over the place.

Re: Amazon’s Echo Chamber

#80

Post by vidarh »

damian2000 wrote: post #68
schwabacher wrote: post #8

Echo seems really smart to me - the reason Amazon is in hardware is because they are terrified of 'ok google, order me lighbulbs', or 'hey siri, i need a new pair of socks' becoming the way people shop for things online. Amazon made Echo for 'alexa, order me wheat thins', and all the question answering and music playing is just window dressing.

How are they solving the problem of people in the same room with different accents... that sounds like a really hard one to figure out. Google Voice needs some training for example just to be able to recognise the initial "Ok, Google".

I have a broad Scandinavian accent, my Fire TV still understood me right out of the box.

I was long very negative on the short/medium term potential for speech recognition, but while I still don't use it very often, it's convenient in enough situations that I use it now and again.

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