Lab Weekly — 06/29/2018
Examining new viewer behavioral trends; AT&T buys Otter Media; Amazon update trifecta and more
Lab Original
The Intention Gap In Media Consumption
Following our assessment of the evolving U.S. media landscape following the AT&T’s acquisition of Time Warner last week, we turn our attention to the changing viewer behavior defined by a growing gap in intention in media consumption, and the way it interplays with emerging content consumption models enabled by digital content channels, as well as new content formats born out of those digital channels, such as living content, interactive content, and stories.
News Analysis
AT&T Reportedly To Buy Out Otter Media Following Time Warner Acquisition [link]
As we pointed out in our media landscape analysis last week, AT&T is aggressively acquiring content and leveraging them to differentiate its services from competitors, and buying Otter Media, owner of popular anime content platform Crunchyroll, follows the same strategy. Besides, Otter Media owns VRV, an SVOD service, and digital media company Fullscreen, which could be useful for AT&T to further entrench itself in the OTT space with an Amazon Channels-like aggregation play.
Interestingly, Otter Media is also a co-owner of Reese Witherspoon’s production company Hello Sunshine, which has been developing a close relationship with Apple lately after the iPhone company paid top dollars for two scripted series from the company. It will be interesting to see if and how AT&T fully owning Otter Media will change that dynamic as Apple ramps up its initiative in buying exclusive premium content.
Related: Roku plans to launch Amazon Channels-like video subscription marketplace [link]; Apple teams with sesame workshop to develop kids’ programming [link]; DC’s new digital streaming service is opening its beta this August [link]
Amazon Announces New “Delivery Service Partners” Program To Grow Its Logistics Operation [link]
To keep up with its growing business, Amazon is set to expand its delivery capacity and handle the shipping demand with a new program that essentially doubles as a recruitment tool for Amazon’s logistical operation. Amazon says the program will offer new partnering delivery companies access to discounted rates on things like fuel, insurance, and delivery vans, as well as coaching from Amazon and an app to guide deliveries. This means Amazon is providing financial incentives and software support to enlist entrepreneurs and small business owners to start their own delivery service networks within Amazon’s brand.
Similar to the case where Amazon built out Amazon Web Service first as an internal resource before selling it as a cloud computing platform for everyone, Amazon is its own best customer. The upfront cost of developing a platform is justified because Amazon’s own operations will supply the demand first before they are ready to scale the operations. The same is true with the delivery partners it assembles through this program. Although the network only handles Amazon orders today, it could someday become a direct challenge to shipping companies like UPS, FedEx, and the U.S. Postal Service.
Related: UPS to build partially automated warehouse in France [link]; Nuro partners with Kroger for autonomous grocery deliveries [link]; H&M profits drop after logistics problems [link]
Amazon Acquires Online Pharmacy Startup PillPack [link]
This no doubt marks a major step in Amazon’s entry into the healthcare sector, which the company has been laying the groundwork for the past year or so. The acquisition follows Amazon’s joint healthcare venture with Chase and Berkshire Hathaway, which also based in Boston like PillPack. Acquiring PillPack underscores the company’s aspirations to move into consumer-centric healthcare verticals as it leverages its logistics prowess to move the needle on on-demand prescription delivery. And once it establishes that customer relationship via online pharmacy, Amazon will have a touch point to expand into more healthcare services. Interestingly, Amazon reportedly beat out Walmart for the bid, further fueling the feud between the two retail giants.
Related: CVS introduces prescription drug delivery as it braces for Amazon’s possible entry [link]; Fitbit will use Google Cloud to make its data available to doctors [link]; Amazon Dash integrates WePlenish smart containers to automatically reorder kitchen pantry items supply runs low [link]
Amazon Introduces Show Mode To Fire HD Tablets For Hands-Free Alexa Experience [link]
This is the latest move from Amazon to expand the reach of Alexa as the company continues to push for “Alexa Everywhere” strategy. As a best-selling budget tablet product, the Fire HD tablets provide a low-barrier entry for consumers that are curious about using Alexa but don’t have the need for a smart speaker. For Amazon, this boosts Alexa’s user base and capture more consumers with voice experiences and, in particular, voice shopping. The expanded user base is of course great news for brands that have created their own Alexa skills. It is also worth pointing out that the “Show Mode” on Fire tablets are essentially modeled after the Echo Show, and shows Amazon’s determination in exploring a complementary visual component to the Alexa experience.
Related: Amazon launches $40 charging dock that automatically turns Fire tablets to Show Mode [link]; Google Home now understands and speaks three variants of Spanish [link]; Google starts limited public testing of its human-sounding Duplex AI with a small group of “trusted testers” and businesses [link]
Stats To Know:
- The shopper journey is rapidly changing. A new survey by Blis Global finds that less than 25% respondents indicated they rely on TV for new product discovery today. Almost one-third of consumers say that in-store browsing remains their main product discovery channel, followed by targeted online/mobile advertising.
- Instagram is estimated to be worth more than $100 billion, if it were a stand-alone company, marking a 100-fold return for Facebook on the app’s purchase price in 2012, according to a report from Bloomberg Intelligence.
- E-commerce company Zulily, which sells discounted clothing, toys, and home products, says 70% of orders now come from mobile, both from its mobile website and Zulily app.
