It's a gripping real live thriller
... how Amazon plans to hunt down Netflix and make TV streaming its biggest prize.
Published 09/03/2014 | 02:30
As executives at movie and TV streaming service Netflix reflect on the blockbusting success of Season 2 of House of Cards, they could be forgiven for concluding the war for the future of television is won.
Reviewers have swooned over HoC, a $100m (€73m) tale of Washington DC skulduggery. Subscriptions are through the roof with revenues topping $4bn in 2013. More and more of us are coming around to the Netflix way of looking at home entertainment – watching the shows we want at a time of our convenience rather than allowing scheduling to dictate our choices. Still, there is a shadow on the horizon for Netflix. The 800lb gorilla of the internet era, Amazon, is about to get into TV streaming in a very serious way. Given its track record in taking on incumbents and blowing them out of the water, perhaps Netflix founder Reed Hastings should cancel the celebratory champagne. This battle is a long way from over.
The latest salvo was fired by Amazon days ago with the announcement it is to pick up the BBC's recently decommissioned Ripper Street (shot in Dublin). The new season will air on Instant Prime, Amazon's live streaming website (as yet the service is not available in Ireland). This is the first time Amazon has made clear its intent so directly and it is difficult to interpret the move as anything other than a blast across the bows of Netflix.
That Amazon has serious ambitions for its streaming business is not in any doubt. In addition to offering catalogue movies and shows it has been busy commissioning original content. Among its high-profile projects are political drama Alpha House (starring John Goodman and written by Garry Trudeau, creator of the Doonesbury comic strip) and an adaptation of Michael Connolly's Harry Bosch crime novels.
Of itself, none of this may seem especially remarkable. Most have started to accept streaming is the future, that, 10 years from now, TV will be a markedly different experience. What should concern Netflix, and others is Amazon's reputation for single-mindedness, to say nothing of its willingness to forgo short-term profits in favour of building a lasting brand (for most of its first 10 years, the company posted a loss).
With his goofball body language, Amazon founder Jeff Bezos can come off as the quintessential tech-industry dork – off the charts intelligent but socially awkward. In private he is reputed to be a ferociously competitive, hard-nosed operator who regards the corporate world as a jungle where the only way to get ahead is to devour your rivals.
He has built a mega-corp in his own-image. Amazon does not believe in a softly-softly approach. This is a company where cosseting rarely come as standard. Working conditions at its huge distribution warehouses in the US have been criticised as excessively tough.
The picture ex-employees paint is of an environment where shirkers and shrinking violets are strongly discouraged.
Bezos certainly displayed great ruthlessness and considerable imagination by patenting the concept of one-click shopping. You may wonder why other websites don't offer single click purchasing. It's because Amazon is deemed to have invented the process and will deploy a SWAT-team of lawyers should anyone violate its copyright.
Amazon plays by the rules but punches hard. Just ask the founders of Diapers.com, who found just how tough life can become when Amazon has you in its sights. In 2009, the successful start-up was approached by Amazon and told that Bezos's company planned to broaden its space in the infant care market: Diapers.com might want to consider selling up to its new rival. When the founders demurred, Amazon slashed prices on nappies. After Diaper.com lowered its prices, it saw Amazon's fall once again, in exact proportion, according to a Bloomberg Businessweek story.
It became obvious Diapers.com could not stay independent with a nemesis such as Amazon breathing down its neck. When the company received overtures from Wal-Mart, Amazon turned the screws even tighter. While Diapers management was sitting down with Amazon in Seattle to discuss a theoretical selling price, Amazon announced a new serviced called Amazon Mom with discounted shipping – far beyond what Diapers.com could offer. At Diapers.com worried staff were unable to reach senior executives, still locked away with Amazon. Diapers.com understood it was dealing with an intractable foe and sold up.
As Amazon ratchets up its TV presence, Netflix executives may experience a chill in their bones. When Jeff Bezos sets out to achieve something he is invariably successful. Netflix has an impressive lead.
Will it be enough?