Amazon could find success in new TV shows despite recent losses
In its third quarter last year, Amazon reported a loss of $437 million. But not each dollar gone was due to product flops, like the $83 million worth of unsold Fire Phones.
In 2014, Amazon introduced three tablets and two e-book readers and one-hour shipping in Manhattan and now has a Golden-Globe winning TV series, "Transparent." While some analysts questioned CEO Jeff Bezos' plans for expansion following the release of a less than ideal figure, it may be the company's ambition that keeps it ahead of the competition in 2015.
"Their hope is that you're going to say, 'Hey, I want to watch "Transparent." Oh, to do it I have to become an Amazon Prime member,'" said Nicholas Thompson, a digital expert for The New Yorker magazine, which plans to launch a TV show on Amazon. "Then when you're an Amazon Prime member you're going to buy toasters, you're going to buy books, you're going to buy everything, so that's how they're going to make their money."
Amazon Prime is the company's membership service, which in March increased its subscription price from $79 to $99 per year. It gives customers access to perks like free two-day shipping and streaming movies and TV shows.
Bezos is hoping that with all the buzz around Amazon's new shows, including the recent addition of Woody Allen to write and direct the "Untitled Woody Allen Project," fans won't hesitate to sign up for Prime, Thompson said.
"The economics are fascinating," Thompson said. "... What they found is that when somebody becomes a member of Amazon Prime, they buy more stuff of everything on Amazon because the shipping gets easier, the whole process gets easier."
Despite its financial losses, Amazon may be making the right moves. Movie and TV buffs alike have been spectators to the brand-new ball game of streaming content. Even major media companies like HBO and CBS, which have seen success on traditional media platforms, have launched new streaming services.
"We don't just watch it just on those TVs in our living room. We watch it on all kinds of different screens," Thompson said. "The people who make it is changing because it's easy to get content into these different screens."