AMZN - Amazon.com Inc.

[Spekulatius]

There are certain nuances that one needs to consider, if I had to bet on Amazon Prime TV vs Netflix, it will always be Netflix.

Netflix had a multi-year head start and passed the Growth CAPEX required to create a moat. Although they are far from a monopoly in a traditional sense, they are definitely dominant. In order to reach Netflix depth of data know-how, competitors will have to spend $$$ and time to reach that level. Unless there's a major pivot on how data dictate how content is produced, marketed, and delivered, then I do not see how they will catch up. Unless we have a Sam Walton of Netflix in our midst and gunning for them through sheer cost efficiency, but that's not going to happen with Amazon, Disney, etc. Another concern is if they have a string a flops because of data dictating content, such as Bright, but I've heard that was not actually a flop from an ROI perespective. Again not invested in the name, but the core argument is to slap a $500 Billion Dollar Valuation on Amazon Prime TV using Netflix as a comp is similar to comping Tim Horton's with Starbucks.

Prime is a legit contender, but it’s not Netflix. It could easily see Amazon adding a subscription offering for a few $/ month as they keep adding content. Right now, it is a supplementary service just like Amazon music (which I also use as a prime subscriber ) rather than a viable standalone offering.

[Xerxes]

TV Prime was really there to add to the stickiness of Prime membership.
I don’t think Netflix based comparison are valid to build up a sum of the parts for AMZN. That said we got Lord of the Ring series coming to TV Prime so we never know if they ll price it differently. I just see it as a huge turnoff if they do that. They are better off raising Prime subscription (post-pandemic) as they did few years ago. People will pay higher prime sub fee but will complaint if TV Prime would have a different pricing structure as it will feed their narrative of Bezos = Evil. Which by the way is the cover of this week The Economist.

That said one can value Disney break up value using Netflix multiple for its D+ 

Media space is a growing expanding pie. Not zero sum game I think. In that space Netflix, Disney+ and Prime will be the winners. The rest won’t matter.


Amazon future is to continue to get ad revenues and monetize its massive customer base. That is the third pillar behind e commerce and clouds. Somewhere in the future is their for-rent Cashless Go technology and whatever else they are cooking.

Folks often talk about Alphabet being the Berkshire of technology. I think that is Amazon. Not Alphabet and definitely not SoftBank. 

[D33pV4lue]

Media space is a growing expanding pie. Not zero sum game I think. In that space Netflix, Disney+ and Prime will be the winners. The rest won’t matter.

I think it is WAY to earlier to start declaring winners of the streaming wars. I think Disney + will do well because it serves a niche that may be overlooked by other players. Personally I hate Prime Video. Do I use it? Yes, but I hate how in between videos I can watch they throw in rent or buy options or shows on HBO and other sites that I need to sign up for. The User Interface is clunky and its suggestion algo IMO is terrible. That being said if you have a movie in mind that you want to rent/buy Amazon is awesome. I've been slowly building my collection of movies. Netflix is great but what is going to happen when competition for shows heats up. Streaming could become commoditized switching between Netflix, Hulu, Apple TV, and HBO depending on which shows are out and that is what scares me the most about all of these platforms.

[valueinvestor]

Amazon future is to continue to get ad revenues and monetize its massive customer base. That is the third pillar behind e commerce and clouds. Somewhere in the future is their for-rent Cashless Go technology and whatever else they are cooking.

Folks often talk about Alphabet being the Berkshire of technology. I think that is Amazon. Not Alphabet and definitely not SoftBank.

+1

[Xerxes]

Media space is a growing expanding pie. Not zero sum game I think. In that space Netflix, Disney+ and Prime will be the winners. The rest won’t matter.

I think it is WAY to earlier to start declaring winners of the streaming wars.

Agreed on WAY to early part, but i just don't see it as a "streaming wars" as everybody else like to call it, to me that implies a zero-sum game, which is not.
In my view, the three that i mentioned (and specifically D+ + Netflix) would just expand faster than the rest of them as the market naturally expands from linear TV to digital.

On Amazon's side, Prime TV is just there to add stickiness to the Amazon flywheel. There is a lot of marketing lesson in not confusing the customer with different pricing structures, and types of membership. i believe Amazon will do its best to stick to one pricing structure for Prime. but i could be wrong.

[D33pV4lue]

I don't think the end will be zero sum, but the road there will be rocky. You are right in that Prime video for amazon is more of an additional benefit than anything else, but I'm sure they are not complacent about Prime Video. Between Disney +, Netflix, HBO, Showtime, Apple TV, Youtube TV, Hulu, and Prime they are all going to be competing to get the top shows/movies. Traditional media companies are going to want their movies/shows on their own platform, not Netflix and there will be intense competition until the herd is shaken out. IDK maybe I'm too pessimistic I just don't see enough room for them all.

[Liberty]

Q2: https://ir.aboutamazon.com/files/doc_financials/2020/q2/Q2-2020-Amazon-Earnings-Release.pdf

Operating cash flow increased 42% to $51.2 billion for the trailing twelve months, compared with $36.0 billion for
the trailing twelve months ended June 30, 2019.
• Free cash flow increased to $31.9 billion for the trailing twelve months, compared with $25.0 billion for the trailing
twelve months ended June 30, 2019.
• Free cash flow less principal repayments of finance leases and financing obligations increased to $21.3 billion for
the trailing twelve months, compared with $16.1 billion for the trailing twelve months ended June 30, 2019.
• Free cash flow less equipment finance leases and principal repayments of all other finance leases and financing
obligations increased to $19.4 billion for the trailing twelve months, compared with $13.0 billion for the trailing
twelve months ended June 30, 2019.
• Common shares outstanding plus shares underlying stock-based awards totaled 517 million on June 30, 2020,
compared with 510 million one year ago.
• Net sales increased 40% to $88.9 billion in the second quarter, compared with $63.4 billion in second quarter 2019.
Excluding the $582 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the
quarter, net sales increased 41% compared with second quarter 2019.
• Operating income increased to $5.8 billion in the second quarter, compared with operating income of $3.1 billion in
second quarter 2019.
• Net income increased to $5.2 billion in the second quarter, or $10.30 per diluted share, compared with net income of
$2.6 billion, or $5.22 per diluted share, in second quarter 2019.

[Liberty]

Deliveroo approval:

https://www.marketwatch.com/story/amazon-finally-wins-approval-from-regulator-to-gobble-up-minority-stake-in-deliveroo-11596565315

Launching in Sweden:

https://www.reuters.com/article/us-amazon-com-sweden-idUSKCN2501OA