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[amazon] Video Is Turning Amazon Into Much, Much More Than the Everything Store

Whaaat?

In short, what seemingly started as a way to get people to sign up for two-day shipping has turned into a major force in the world of entertainment. Prime Video may have started as a perk to draw in more Prime members. Now, it’s just as easy to believe that Prime Video may be its own draw, and two-day shipping a nice perk.

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Video Strategy

In 2011, video became a Prime perk. But the company saw that to get members to really care about video on Amazon, it had to offer something more distinctive and original. In 2013, the company began to do just that, premiering pilots for 14 shows that year. The company let customers rate the shows and, using that data, decided which to extend to full seasons.

The company has also long had its eye on movies—it says it plans to release 12 to 14 original films each year. It released the first, Spike Lee’s Chi-Raq, in February. Earlier this year, it picked up four indies at Sundance.

Video Potential

Amazon, however, isn’t a studio at heart; it’s a retailer and a tech company. So it’s not surprising that the way it does video dovetails with both of those strengths. The Amazon Video app, for example, includes “X-Ray,” a feature that allows the company to add a layer of clickable data on your screen, such as the names of the actors in a scene, served up by Amazon-owned IMDB. Its Fire TV—Amazon’s answer to Apple TV, Chromecast, and Roku—includes “ASAP,” a playback feature that predicts what you want to watch next—much like it suggests other products you might want to buy—and begins buffering it before you need to watch it. Meanwhile, Freeman says Amazon’s video service supports 4K and HDR for some originals.

Nice perks, but as with Prime Video itself, what seems like a perk at first has the potential to contribute more broadly to Amazon’s growth as a business.

Video Spill Overs

To understand how big a deal video is for Amazon, you need to understand how big a deal Prime is. The company won’t reveal how many Prime members it has beyond “tens of millions,” but it’s a crucial part of Amazon’s business. And once subscribers shell out $99 to become Prime members, that initial outlay of cash turns them into remarkably loyal shoppers.

And video, it seems, only makes them more loyal.

My 2 cents:

“Video might have seemed like a funny thing to pair with two-day shipping five years ago. But Amazon seems to have known what it was doing all along.”

If you ally Amazon’s analytical power and propensity to engage in pricing and content experimentation, you get an Amazon Video that is improving upon Netflix’s success with House of Cards. Amazon, the insane sales network that it now is, can at the same time carve a share of the new media space while reinforcing its Prime cash cow.

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[amazon] Amazon launches its own clothing brands

Whaaat?

Over the years, Amazon has challenged the traditional brick-and-mortar model, redefined the books landscape, and gone all-in with original programming. Now, the retail giant is foraying headfirst into fashion.

Amazon has released 1,800 products, ranging from women’s clothing and bags to children’s clothing to men’s tailored apparel, spanning over seven private labels.

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Amazon sees its fashion arm playing a similar role to Amazon Basics, where it sells home-brand electronics. Through these new labels, the company will supply products that third-party sellers are not providing to Amazon’s 300 million customers.

Starting with the acquisition of online clothing retailer Shopbop in 2006, Amazon has been taking smaller fashion ventures under its wing. It went on to scoop up My Habit and East Dance too. In an attempt to further its presence in the world of fashion, Amazon also sponsored the New York Men’s Fashion Week for the first time last year.

Now, the retailer is pushing the envelope by ramping up the hiring for its private label team. The company is allegedly in talks to hire Frances Russell, former Marks and Spencer womenswear boss. The intention to hire managers with “strong product sensibility in both basic and fast-fashion segments, and [the] ability to identify and capitalize on current trends” aligns perfectly with the launch of the private labels.

My 2 cents:

Amazon’s embracing its inner retailer in a very interesting move for the e-commerce sphere in general. Own brands have been the key to success in the bricks and mortar space for its high return, low risk exposure and positive supplier development experience facets. Allied to Amazon’s margin slashing potential, this is a very interesting trend and one that could take for more product categories in the future and across multiple e-commerce platforms in general.

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[amazon] Amazon.com’s Drones Are Ready for Primetime

Whaaat?

This is whaaat!!

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Drones and Trailers to solve delivery bottlenecks

Package delivery companies have gotten a boon from the rise in e-commerce, but that could be undone by the proliferation of drone delivery.
Shipping expenses are also taking a proportionally larger portion of Amazon’s revenue, growing to $8.7 billion last year, or 9.8% of revenue. Delivering items by drone would not only delight customers, but could help the company save on expensive shipping costs.
More recently, Amazon announced it will be using branded trailers attached to trucks to ship packages in between fulfillment centers, and Amazon will continue to rely on its shipping partners to drive them from point to point.
The trailer system and the drones are just two of the many experiments Amazon is carrying out to make delivery faster and more convenient. With every step it takes in that direction, Amazon strengthens its grip on the retail industry and burnishes its economic moat. Unlocking drone delivery could accelerate Amazon’s growth like nothing before it.

Drone Wars
Walmart: Adding credence to the future of delivery drones was Walmart’s recent announcement that it too would like the automated flying machines to ship products. In October, the world’s largest retailer filed with the FAA for permission to test flying drones outdoors after months of testing it indoors Wal-Mart similarly hopes to one day use the machines to deliver orders as a spokesman pointed out that 70% of the U.S. population lives within five miles of a Wal-Mart store, right within the range needed for effective drone delivery.

Alphabet: Alphabet, Inc. is also working on drone delivery as its Google Express division has partnered with a number of retailers to provide speedy delivery in cities.

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[amazon] Amazon Cloud Gets More Business-Friendly

Whaaat?

Amazon Web Services continues to woo Microsoft corporate customers, this time with a new Active Directory service.

One of the truisms about the growing cloud computing battle is that Amazon Web Services (AWS) is the largest competitor, by far, but that Microsoft Azure is a more corporate-friendly option. This comes as no surprise given that most big businesses today run tons of Microsoft Windows, Office applications, Exchange e-mail, SharePoint document sharing, SQL Server databases and what-have-you.

Underlying all that Microsoftian software is Active Directory, which provides a single-sign-on to various applications and makes sure only the right people have access to the right stuff. A version of Active Directory, cleverly called Azure Active Directory, also runs on Microsoft’s Azure cloud.

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For those unfamiliar with this stuff, a public cloud is a massive set of shared computing, storage, and networking capability run data centers around the world. All of that power is available to rent, obviating the need for big customers to buy tons of new servers and storage on their own. Amazon was first into the pool here, having launched its storage service in 2006, but Microsoft is in now with Azure, IBM with SoftLayer and Google with Google  Compute Cloud.

Amazon late last week announced a new Active Directory service, actually a managed service, running on AWS. The fuller featured AD managed service could mean that companies can now more easily run and manage their SharePoint, SQL Server (and custom applications built on those technologies) beyond the firewall on AWS.

This has been a long-running strategy for Amazon. Two years ago the company announced support for Microsoft System Center software that companies use to manage their Windows Server and associated applications. This meant that a company’s Microsoft systems administrator could now manage Windows applications running on AWS almost as if they were running in her own server room.

In Leong’s opinion, Microsoft customers typically pick Azure because they’re already affiliated with the Microsoft developer ecosystem and they have a contractual relationship with Microsoft, not so much because they are they are so focused on Microsoft infrastructure per se.

In short, public cloud leader Amazon has had a limited hybrid cloud story to date, but is chipping away at that problem by offering bridges to Microsoft applications running in-house.

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[amazon] Amazon’s Ingenious Scheme to Undermine Black Friday

Whaaat?

The company had eight days of Black Friday deals last year, too, but this year it’s giving the promotion an even bigger push: new deals will be added as often as every five minutes on Amazon’s dedicated Black Friday page, twice the rate of last year.

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Amazon is onto something bigger. It’s a pivotal time in the company’s history, which makes scrutinizing Amazon’s Black Friday strategy even more interesting. After enduring years of razor-thin profits—and even some losses—as the company poured money into building out distribution centers and logistics, it finally looks to be reaping some benfits. Don’t be surprised if 2015 is the tipping point where the world’s largest online retailer makes a lasting mark on the shopping holiday.

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