Amazon Goes Primetime with Facebook
In trying to figure out the logic behind Amazon doing a Facebook-based pre-release of its original/co-opted series “Convergence,” it’s best to look to the advice from the 6th century Chinese military strategist, Sun Tzu. “The Art of War” has been the roadmap for everyone from Ho Chi Minh to Tony Soprano.
The decision for the Seattle-based mega retailer to utilize Facebook’s tremendous reach and ability to create virality to promote its new show is a classic from Sun Tzu: “If you know others and know yourself, you will not be imperiled in a hundred battles; if you do not know others but know yourself, you win one and lose one; if you do not know others and do not know yourself, you will be imperiled in every single battle.”
The facts tell us Amazon’s move was close to near-genius and maybe (just maybe) a sign of things to come. Facebook has more than a billion users, more than five times the number of Amazon accounts. The number of Amazon Prime users (50 million) is about 20% of the company’s total base. Looking at financials, Facebook’s market cap exceeds Amazon’s by close to $30 billion. Facebook has declared war on YouTube; Amazon’s online video efforts have been, at best, mixed. Amazon has excelled in creating (and curating) some exceptional original content.
There is no misdirection or hidden agenda in the Amazon-Facebook relationship (as in the misattributed Sun Tzu quote, “Keep your friends close, keep your enemies closer.”). The deal — even if it’s a one-shot experiment — is recognition that in any attempt to own the entire online video value chain (from creation to distribution to monetization) is foolish. Apple is trying with little success. Same with Google, Sony, Samsung, NBCUniversal, Twitter, and so on.
Amazon has original content, a popular streaming device, a world-class web services infrastructure business, lots of stuff to sell and (of greatest importance) the credit cards of 244 million people. Facebook has money, a network in search of more applications and services, and the need to create sustainable revenue streams. It’s an interesting partnership, but is it enough to give Amazon the impetus to turn its video distribution business to the world’s largest social network?
Focusing just on the social network debut of the UK import, “Convergence,” the plan is a simple bait and hook gambit. Offer a free preview of a new, exclusive TV show and let people know in order to watch the rest of the series, they need to become Amazon Prime members. And for your troubles, you also can watch some other cool shows (“Transparent,” “Mozart in the Jungle”) and get your stuff delivered more quickly than non-Primers. Unfortunately, given Amazon is secretive about its Prime Membership numbers, we can only guess as to the success of this stunt.
Or, we can wait until Facebook launches a new OTT service powered by Amazon.
Netflix vs. Alibaba in China
It may have been Chris Rock who once said, “A man is only as faithful as his options.”
Extrapolating the comedian’s insight into matters beyond adultery, in the world of consumer services and technology, we have come to realize the average web user is fickle. Whomever offers the best deal, the most swag, or the latest coolest beans with the top cred generally comes out on top. People moved away from Yahoo search quicker than you can say “greedy VCs” once Google came along. All the popular photo-sharing apps were dumped when Instagram burst on the scene.
Alibaba announced it was going to service its own billion-plus market of users with its own video streaming to compete with Netflix’s proposed move into China. Pundits began to fear Netflix’s sky was falling, but the complete opposite is true. Alibaba will be the pioneer in China who suffers the fallout from the (sort of) first-mover advantage and Netflix will quietly move in and learn from TMall Box Office’s (TBO) mistakes. As stated in the commentary above, success in the e-commerce space (which is Alibaba’s bread and butter) does not assure a win in media endeavors.
TBO must overcome the Chinese market’s unfamiliarity with paying for content, its penchant for copyright infringement, and the government’s unpredictable censorship. A recent story from CBS News chronicled a number of the Chinese government’s random acts of content banishment. Quoting a popular Chinese blogger, the report went on to say, “It was not a public issue, but has become one after shameless officials wielded their powerful administrative powers,” Ren Zhiqiang, a businessman who has been outspoken on social issues, wrote on his microblog. “What people are concerned about is not cleavage, but that a bunch of cultural hooligans are in charge of making approvals.”
After all is said and done, and Alibaba struggles with the obvious obstacles, Netflix may have the opportunity to provide Chinese consumers with a new option. But then again, Netflix may elect to get more bang for its buck and (wisely) focus deeply on Latin America.
What If “Seinfeld” Bombs on Hulu?
Don’t hold me to this, but I won’t be totally stunned if Hulu’s $160 million deal for the rights to stream all 180 episodes of “Seinfeld” doesn’t prove to be a goldmine. A goldmine for the streaming network, that is. Sony Pictures TV, Castle Rock, as well as Jerry and Larry David, will make out like bandits although George, Kramer, and Elaine will get nothing from the show about nothing. More about that some other time.
It’s been 17 years since the final episode when the Fab Four were hauled off to jail for being bad samaritans. Since ’98, the show has been in syndication via local stations and now TBS. Digging through ratings of syndicated programming, for 2013–14, Seinfeld was ranked 21st, outpaced by the likes of “The Big Bang Theory” and “Modern Family.” Fast forward to the week of June 16, 2015, and “Seinfeld” is among the missing, not even making Nielsen’s top 25 syndicated shows for the week. Is everyone waiting for streaming to commence?
I see the risks being the fact that the show is not relevant to millennials and existing fans have see each episodes so many times, they can act out their favorite moments at family gatherings. But then again, watching Jerry throw a marble rye up two stories of a Manhattan apartment building never gets old. At least for me.