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Technology Stocks : Netflix (NFLX) and the Streaming Wars
NFLX 114.05+3.4%3:59 PM EST
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To: tripleman who wrote (1014)5/9/2014 11:46:07 AM
From: ChrisGillette2 Recommendations

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<<It's sketchy to make a prediction this fast. Here's a good article that brings up why Amazon very well might grab some good market share>>

First, the article you reference is sloppy at best. It's deceptive to state that Amazon "streams have tripled year over year" without also mentioning that Amazon started from a negligible base of 0.6%.

Second, at what point is it fair to make a prediction/analysis? Amazon launched its SVOD service in early 2011 (i.e., more than 3 years ago), yet still has negligible usage despite spending billions on content. In effect, Amazon is spending 50% as much as Netflix on content while getting only 5% as much usage.

What's happening with Amazon vs. Netflix is nothing new. Small company creates category, gets huge. Then big company thinks that it can steal the category by simply throwing money at the problem.

Think Microsoft's Bing vs. Google in search, or Google+ vs. Facebook in social. These attempts failed because it's not just about the money, it's about the brand.

Netflix created the streaming category and is now huge. Although Amazon has spent a ton on content, it will continue to fail because the Prime brand is associated with shipping, not streaming. And the branding issue is just one of many mistakes that Amazon has made in this space...
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