Amazon Enters The Contest With YouTube

Amazon stock, Amazon Video Direct, Prime

According to several analysts, the e-commerce giant has the ability to efficiently contest in any business.

On Tuesday, the world’s biggest online retailer, Amazon.com, Inc. launched a service similar to YouTube which let the users to upload videos and earn royalties from them. This will mark the leading e-commerce giant to contest with Alphabet Inc.’s most popular YouTube.

Dubbed as Amazon Video Direct, the new service will offer the uploaded videos on rent or to buy in order to enable an ad free view; or the uploaded videos can be packaged together in order to be offered as an add-on subscription.

Company’s highly popular Prime loyalty program has been following the same pattern. The service offers original TV programming along with the accessibility to Prime Video and Prime Music and like digital entertainment products. For an annual fee of $99, it also offers one-hour delivery of purchases.

The most popular video streaming application, YouTube presents ad-supported, free service along with a subscription option against a nominal fee of $10 dubbed as YouTube Red.

Nevertheless, Amazon will require a lot of time to get closer to YouTube who has been ruling the internet for a long time since 2005.

According to Michael Pachter, an analyst at Wedbush Securities said that in his opinion, it is highly unlikely that just 50 million user base of Amazon Prime will have significant blow on the colossal 2 billion user base of YouTube.

One of the analysts at Tigress Financial Partners, Ivan Feinseith opined that although he’s a bit cautious regarding the new business line of the company however according to his beliefs and knowledge the online retailer has the adequate financial resources and technological means to contest with any business.

He added, “I don’t know if it’s going to totally disrupt YouTube or even some of the other services, but for those that are heavy Amazon users, it will have an appeal.”

Through the new service, Amazon’s service consumers can make their videos available in Austria, Germany, Japan, the United Kingdom, and United States.

For the service, Amazon has signed off partnership with several companies including, but not limited to, tech blog Mashable, toymaker Mattel Inc., the Guardian, and Conde Nast Entertainment. This endorses the company’s firm push into video.

On Tuesday, Carlos Kirjner, an analyst at Bernstein stipulated in a client note that this year on video content, tentatively e-commerce giant will spend close to $2.9 billion for Amazon Prime.

Recently, $335 billion company released its video program on a monthly subscription for $10.99. It is now looking forward to present standalone video streaming service against a monthly fee of $8.99.

Since it’s outperformed earnings, Amazon’s stock has had quite modest growth. The stock also helped pushing the S&P 500 to its best day in two months. At the market which closed on Tuesday, Amazon.com, Inc.’s stock went up 3.43% and stood at a price of $703.07. it.

 

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