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Bezos: Amazon Doesn’t Compete With Netflix

‘I think people are going to subscribe to both,’ CEO says at Recode conference 6/01/2016 7:30 AM Eastern

If you think Amazon’s SVOD service competes with Netflix, you’re thinking about it all wrong, according to Amazon CEO Jeff Bezos.

 

"We don't compete with Netflix," Bezos said Tuesday at Recode’s Code Conference. “I think people are going to subscribe to both.”

 

Still, Amazon has been making some moves that would seemingly help its SVOD offering compete more directly with Netflix, including a recent decision to offer a standalone OTT service that would complement the way it bakes SVOD into Amazon Prime and perhaps set up a way to broaden the international reach of its video service.  

 

Amazon doesn’t break out Prime subscribers nor how many consumers have taken its new standalone SVOD service, but, according to a recent study from Strategy Analytics, Netflix has 53% of the market, putting it well ahead of Amazon Prime Video (25%) and Hulu (13%). But, to Bezos’s point, the research firm also found that nearly 40% of U.S. homes subscribing to a video streaming service take at least two of them.

 

Bezos also highlighted how Amazon Prime, which includes perks such as free two-day shipping of products purchased via Amazon.com, helps to drive the economics of its video business.

 

"From a business [point of view] for us, we get to monetize that content in an unusual way," Bezos said.

 

Bezos also expanded a bit on Amazon’s decision last fall to halt the sale of the Google Chromecast and Apple TV – products that compete with Amazon’s own Fire TV platform – and to focus on other platforms that “interact well” with Amazon’s own streaming service.

 

“I think private business discussions should stay private," he said, but did allow that Amazon wants its own Prime Video player to be on those devices “with acceptable business terms.”

 

“We’re happy to sell competitive products on Amazon, and we do it all day,” Bezos said. “Roku players, Xbox and PlayStation consoles are among the devices that currently fit the bill. “You can always get the player on the device,” he said. “The question is, can you get it on there with acceptable business terms?”

 

Bezos also said Amazon is deeply committed to the smart home market, noting that his company has “more than 1,000 people dedicated just to the Alexa and Echo ecosystem.”

 

“And there’s so much more to come. It’s just the tip of the iceberg,” he said, noting that Amazon continues to expand the number of third-party apps that can work on its platform.

 

Meanwhile, others are considering ways to link Echo to their own platforms. Last week, Dan Herscovici, senior vice president and general manager of Xfinity Home at Comcast, acknowledged that “there’s no reason why that voice interface [from Amazon Echo] couldn’t also interact with Xfinity Home.”

 

At the moment, that kind of integration is theoretical, but “it’s not something outside the realm of possibility,” Herscovici said. “The point is we're open to best in class experiences. We're open to seeing things through the eye of the consumer and having the consumer drive what they want to be part of the ecosystem.”

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