Article also published on Brand Republic’s The Wall blog –
Amazon has recently surprised, with the success of one of its TV shows at the Golden Globes and has more plans to create a TV series with Woody Allen.
The Woody Allen partnership received a bit of a kicking from some quarters http://www.vox.com/2015/1/14/7543937/woody-allen-amazon-bad but I don’t agree with this view. Premium, subscription TV viewing is driven by brand perception and a sense of aspiration. From a content perspective, Allen represents an esoteric and relatively elitist partner and therefore a good fit for the direction a ‘mainstream’ Amazon wants to take.
Subscription TV is a profitable place to be, where the size of an audience matters less than the profile of the programming. This is because the money comes from subscriptions and channels are not dependent on audience. Interestingly, TV seems to have cracked the paid subscription model, whereas Newspapers have not – excepting isolated examples such as The Financial Times
An interesting change in direction for Amazon then, but how are they shaping up with regards to the ‘traditional enemy’ – the 3 other major global digital players – Google, Apple & Facebook (G.A.F.A.). What are these brands seeking to achieve? Google – is all about discovering and organising content. Apple helps us consume and create content on lovely devices, whilst Facebook, Snapchat and Instagram provide communities where people can gather around content
But what is Amazon all about?
What Amazon appears to be doing now, at least in the entertainment sector, is developing a ‘vertical integration’ strategy. Whilst this approach is relatively nascent in the TV market (Fire TV), it is already well developed in the books and reading sector. Via their Kindles, they already own a good deal of the means of consumption.
In the spirit of some (hopefully) productive post rationalisation, I would like to compare Amazon’s developing business strategy, with the name chosen for the company in ‘94. Bezos borrowed ‘Amazon’ from the river, primarily because it is big, and he wanted to indicate that he had the same ambition from the outset.
Just like the Amazon River, the digital Amazon wants to carry its consumers all the way from the content ’source’, to its ‘delta’ – or the point of delivery.
Pushing the aquatic analogy a little further (stay with me… ) and talking about the ‘water cycle’ – Amazon even wants to re-cycle its customers, like the water that evaporates from the Atlantic and then falls again as rain in the Amazon basin.
Amazon is gunning for vertical integration in the entertainment sector, seeking to continually supply a sublime content stream (or river) and in doing so are confirming, even if it is by accident, that its name suits it very well indeed.