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Hey everyone.This is Jason Del Rey luck‘s new technology correspondent.
I’ve spent much of the past decade reporting on Amazon and its successes, failures, opportunities, and shortcomings, both for the online technology publication Recode (RIP) and my new book. winner sells all.
Still, at various points along the way, I’ve struggled to understand the rationale behind the company’s big bets. One is Amazon’s ambitious and incredibly expensive investment to become a major player in the TV and movie streaming business.
When Amazon first introduced Prime Video in 2011, its content library was so unappealing that Jeff Bezos decided to offer it as part of the Prime shipping program.
“I remember Jeff using those exact words, which former Amazon Video executive Bill Carr said to me years ago, ‘Oh, by the way,’ ‘Yes, Prime is $79 a year. Oh, and by the way, some movies and TV shows are free. And if it’s free, how much can a consumer complain about the quality of a movie or TV show?”
But over time, Amazon has become one of the most aggressive spenders in the entertainment industry, reaching tens of billions of dollars. Amazon executives have long argued that Prime’s video business is the company’s retail engine, helping it sell more products, but Amazon’s own employees have occasionally questioned it.
As technology journalist Brad Stone writes in his 2021 book: amazon unboundAmazon Video employees he spoke to found “little evidence of a link between viewing and purchasing behavior, especially evidence that would justify the huge spending on video.”
The truth is, Amazon was making TV shows and movies because “Bezos wanted Amazon to make TV shows and movies,” Stone wrote.
So what happens after Bezos announced in February 2021 that he would hand over the CEO role to longtime AWS chief Andy Jassy? Well, the video bet continued. Shortly after Bezos announced his successor, Amazon announced that it had acquired the rights to “Thursday Night Football,” in a deal that runs through 2032 and is said to cost about $1 billion a year. A year later, the tech giant acquired MGM for $8.5 billion, its second-largest acquisition ever.
But there are also signs that Amazon’s video efforts under Mr. Jassy may be a little more focused on revenue. Amazon earlier this month cut hundreds of corporate jobs across its streaming and studio businesses. And in a big change, Amazon Prime Video movies and TV shows will include ads starting January 29th, unless customers pay an additional $2.99 per month for ad-free slots.
At the same time, the company is also making moves to acquire rights to more live sports, agreeing to invest more than $100 million in regional sports networks and giving the tech giant streaming to more than 30 teams across Major League Baseball. can be given the right. , the National Hockey League, and the National Basketball Association. Video industry insiders say live sports is an area Mr. Jassy is especially passionate about, and the company hopes to attract more lucrative TV advertising dollars because it is one of the last bastions of subscription viewing. It is said that it is a field in which Amazon’s $40 billion advertising business is already one of the company’s most profitable divisions.
So when Fortune CEO Alan Murray asked Jassy in a recent interview to name the company’s initiatives he’s most excited about, it’s no surprise that Amazon’s CEO began by saying, there is no.
“I’m very bullish on what we’re doing at Prime Video.”
Next week, Amazon will report its holiday quarter results, and much attention will be focused on what executives have to say about the tech giant’s core retail business and the current behavior of the average U.S. consumer. But I’m also very interested to see any signs of where Jassy and Amazon take this very expensive, one-off side hustle next.
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before departure
Goodbye, Ingenuity. NASA’s Ingenuity Mars Helicopter has been completed nearly three years after becoming the first aircraft to fly over another planet. Planned to demonstrate the technology with up to five experimental flights over 30 days, the team ended up making 60 flights, venturing more than 14 times farther than planned. However, at least one of his rotors was damaged during the final landing, so that’s it while communicating with NASA controllers.
NASA Administrator Bill Nelson: “That incredible helicopter flew higher and farther than we ever imagined, helping NASA do what it does best: make the impossible possible.” , through missions like Ingenuity, are paving the way for future flights in the solar system and smarter, safer human exploration to Mars and beyond.”
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