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Amazon did a lot of funky stuff this year and its paying off

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Holy hell, it’s been a year for Amazon. Jeff Bezos’ former-online-bookstore dumped $13.7 billion to buy a bunch of grocery stores, that speaker you talk to in your living room that Amazon makes is really popular and a bunch of server farms Amazon runs generate more than $10 billion in revenue annually.

The confluence of all these things has led to an incredible rise in its stock on the year — one that might be even more impressive than Apple’s slow march toward hitting a $1 trillion market cap (assuming the iPhone X story plays out the way they hope). Amazon is nowhere near as big as Google or Apple, but at the same time, its core business is an online retail operation that operates with razor-thin margins. For the most part, Bezos has gotten the benefit of the doubt from Wall Street, and its strategy of gleefully investing in new operations appears to be playing out as hoped.

Let’s get to the chart:

 

And with all this, its founder and CEO Jeff Bezos is making a run at becoming the richest human in the Local Group. Amazon is investing in a lot of wild operations, like buying Whole Foods, and all of these big moves are starting to coalesce into something that actually makes a little bit of sense as the company looks to become the backbone of the way people run a lot of their daily lives through the internet. Whether that’s buying stuff online, buying groceries, watching movies, listening to music or even using services that are running on Amazon’s invisible infrastructure, the real Amazon is becoming an absolute force in the everyday life of nearly every internet consumer.

So, because Amazon did all the stuff this year, we’re just gonna run through each one bit by bit, starting off with probably its most important one.

Amazon’s server business is booming

Were it not for AWS, Amazon probably would not have posted a profit in the string of quarters that it did. We’ve noted this before, but here’s the money chart again:

 

While Amazon is increasingly facing a lot of competition from Microsoft’s Azure, as well as Google Cloud, it was one of the original infrastructure operations that gave birth to modern internet services, helping startups get off the ground with servers that they didn’t have to buy themselves. It was also one of Amazon’s most ambitious bets, and one early example of how Amazon was willing to bulldoze its way into new markets orthogonal to its core business model.

The bet paid off, with AWS now on track to generate more than $10 billion annually. More importantly, that $10 billion annually comes with a pretty healthy margin — though, over time, that margin may slip down. For the time being, though, it’s an impressive business compared to the razor-thin profits that Amazon might generate from its retail operations and a good data point as its media services like video or music start to play out.

And, as usual, recurring revenue is a story that Wall Street loves. Amazon is a company that people will often tell you not to bet against, and its stock is up more than 50 percent on the year thanks to an array of businesses that all appear to be showing growth and the company’s recent-ish ability to turn a profit. Amazon can thank AWS a lot for that.

 

Amazon’s play for the vocal internet

Amazon also said the Echo, its voice-enabled speaker, was the best-selling product on Amazon for the holiday season, with millions of devices sold. This is a pretty big deal for Amazon, as it may have stepped into one of the single-best new interfaces for the internet as a whole — as well as reducing the friction further for buying stuff on Amazon. And for a service that is essentially the hub of online commerce in the U.S., having an Amazon-sold item is also a pretty good look for the company.

Even if the devices are relatively cheap, locking consumers into the Amazon ecosystem, in the end, is likely much more valuable than selling a bunch of internet-connected speakers. Amazon Prime gives Amazon an opportunity to turn its shoppers from once-in-a-bit purchasers to a reliable stream of recurring incremental revenue. Amazon doesn’t do much in terms of disclosing how Prime performs, but at the same time, a reliable recurring revenue model is something that Wall Street loves — and something that’ll keep them happy and off Bezos’ back.

We’d love to show you a chart here, but the best we’re gonna get is some kind of vague large number from Amazon. So for now, be skeptical, but assume that it’s big and has a lot of potential ramifications for the future of the internet (as much of Amazon’s operations do) — especially as companies like Google and Apple nip at its heels.

Amazon buys a bunch of grocery stores

Amazon made one of the biggest and splashiest acquisitions of the year, second only to Broadcom’s move to acquire Qualcomm and consolidate the fabless semiconductor market into a single unit (which is an equally very large deal). It acquired Whole Foods, a trendy grocery store chain that has a strong brand, for $13.7 billion — and it went through! This was both wildly, in a very Amazon way, expected and unexpected (and was definitely not a good thing for Blue Apron, which was prepping to go public at the time).

Whole Foods gives Amazon a set of local waypoints for groceries, but also storefronts to get its products in front of consumers. It can apply its wealth of data to reorient the prices of products in such a way to get consumers in the door for their staples while getting them interested in other products. And, maybe, more importantly, it can stick its own products in those stores, like the Echo.

While this gives Amazon a big business right away, it also offers Amazon yet another opportunity to lock consumers into the Jeff Bezos Sphere of Influence. We don’t know the full ramifications here just yet, but it’s another example of how Amazon was ready to just crash its way into a new market that sort of makes sense in the Amazon grand scheme of things.

Amazon, in the end, is setting itself up for a future where it serves as the backbone of how consumers interface with products they use in their everyday life that are, in some way, connected to the internet. These moves may seem drastic and have a very long runway to play out, but if you ask a lot of people in tech which stock they would keep from the FAANG group (Facebook, Apple, Amazon, Netflix and Google), you’re probably going to get Amazon as an answer. And then they’ll reference that Tweet wherever that says Amazon grew x thousand percent since it went public (because, in hindsight, I guess we totally should have seen this coming, and the future played out exactly as it was supposed to). So as we head into 2018, we’ll see if Amazon actually fulfills that destiny.

Also, Amazon should buy a coffee shop

Seriously, Jeff, buy a coffee startup. Maybe don’t spend as much as Nestlé did on Blue Bottle. Or do. Whichever. There can only be good things that come of this.

Read more: https://techcrunch.com/2017/12/29/amazon-did-a-lot-of-funky-stuff-this-year-and-its-paying-off/

New Movie Tech

8K TVs are coming, but you probably shouldn’t buy one yet

Charmaine Blake

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8K TV. Can you tell?

Image: Stan Schroeder/Mashable

“Every now and then, TV manufacturers start a new trend to keep the hype for their products going. If you bought a TV in the last year, a salesman probably told you that some iteration of HDR is a must-have. Your current TV likely supports 3D — and I bet you haven’t used that feature in ages.

The hot new thing at this year’s IFA, Berlin’s trade show which gathers the largest consumer electronics manufacturers, was 8K TVs. I’ve seen those TVs, and I can tell you, they all had an absolutely stunning picture.

I can also tell you that you absolutely don’t need one.

TVs with 8K resolution — that’s (typically) 7,680×4,320 pixels — have been around for a while, in the form of concept devices and prototypes. But the difference this year is that you’ll actually be able to buy one.

At IFA, Samsung unveiled its first-ever QLED 8K TV, the 85-inch Q900FN. It’s got all the bells and whistles you’d expect from a top-of-the-line Samsung TV, including crazy-good contrast, brightness and HDR10+ support. I’ve seen it, and it’s gorgeous. It displayed a short video showing owls and bridges and a lady walking over a meadow and I could clearly see every blade of grass, every feather.

LG, Toshiba, and other manufacturers also had 8K TVs on display at the show, their picture equally beautiful to my eyes.

Toshiba’s 8K TV, displaying a static photo of buttons.

Image: Stan Schroeder/Mashable

It’s tempting to think that this is the next big thing in TVs — after all, Full HD TVs were so much better than the HD Ready ones, and 4K TVs are so much better than Full HD TVs. It’s just natural that the resolution keeps increasing, right?

Well, no.

While it’s possible to tell the difference between 4K and 8K picture, the difference is nowhere near as stunning as the difference between 4K and 1080p a.k.a. Full HD resolution. Your eyes are the limiting factor here, and while the actual numbers get a little complicated, the simple test of actually going to a store and looking at a 4K vs. 8K TV will show you that the difference is not dramatic………………………”

Read more: https://mashable.com/article/8k-tvs/

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New Movie Tech

Streaming TV services now reach 5% of U.S. Wi-Fi households, up 58% since last year

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“The number of U.S. households watching streaming TV services – those that deliver cable TV-like programming over the internet – has grown a remarkable 58% over last year, according to new data from comScore. However, these services still account for a small portion of the overall market, as only 5 percent (4.9 million) of U.S. households with Wi-Fi streamed TV over one of these services in April 2018.

In citing that number, comScore was specifically looking at what it called “pure-play” vMVPDs (virtual multichannel video programming distributors) – a variation on a fancy industry term that refers to live TV services like Sling TV. These services stream multiple channels over the internet without supplying infrastructure like coax cable to do so, and don’t offer other content like original programming or user videos.

Today’s lineup of these “vMVPDs” includes: Sling TV, DirecTV Now, Playstation Vue, fuboTV, Philo, YouTube TV, and Hulu with Live TV. These “pure-play vMVPDs,” as comScore referred to them, are basically that same list, excluding Hulu Live and YouTube TV, as those also include access to non-linear, digital-only content like original programming.

The firm found that consumer adoption of these “pure-play” live TV services is growing significantly, as more people cut the cord with traditional pay TV………………”

Read more: https://techcrunch.com/2018/08/16/streaming-tv-services-now-reach-5-of-u-s-wi-fi-households-up-58-since-last-year/

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Amazon is looking beyond the small screen with potential cinema chain

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Amazon could be looking to buying a chain of cinemas.

Image: Getty Images/iStockphoto

“Amazon has already established brick-and-mortar stores selling its products and groceries, and now it apparently wants a slice of the cinema business.

As reported by Bloomberg, Amazon is looking to acquire Landmark Theatres, which claims to be the largest cinema chain dedicated to independent and foreign films, with 52 theatres in 27 markets.

The e-commerce giant is reportedly working with other suitors to buy the chain from Mark Cuban and Todd Wagner-backed Wagner/Cuban Cos. There have been no decisions made, and with talks still to come, it’s not set in stone that a deal will go ahead.

The potential move into brick-and-mortar cinema echoes Amazon’s efforts to look further than its online presence in recent years, as evidenced by its real-life bookstores and its foray into checkout-free grocery shopping, Amazon Go, not to mention its $14 billion acquisition of grocery chain Whole Foods.

But Amazon’s potential entry into physical cinemas could help further sure up the profile of its Amazon Studios films, such as Manchester by the Sea, an Amazon Original which was nominated for an Academy Award for Best Picture in 2017.

Despite the accolades, there is general tension between newfangled streaming services and the film industry. These concerns are primarily directed to the biggest disrupter of them all, Netflix, which is aggressive in its stance to only show its own films on its service.

Steven Spielberg said earlier this year that Netflix films which either don’t show in cinemas, or only for a short time to satisfy movie awards criteria, shouldn’t get accolades like an Oscar.

“Once you commit to a television format, you’re a TV movie. If it’s a good show, deserve an Emmy, but not an Oscar,” Spielberg told ITV News.

“I don’t believe films that are just given token qualifications in a couple of theaters for less than a week should qualify for the Academy Award nomination.”

Although Amazon is also a disruptor, it sticks to convention when it comes to distribution. It runs movies in cinemas for months before they sit on Prime Video, and is public about ensuring its films screen in theaters.”

Read more: https://mashable.com/2018/08/16/amazon-cinema-landmark-theatres/

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