Amazon’s Moat in Ecommerce is Growing. But Falling in Video. Just Like for Netflix. (US-Asia Tech Strategy – Podcast 125)


This week’s podcast is about Amazon’s competitive advantages. We can see clearly growing moats in ecommerce. But increasing competition is revealing the lack of defenses in video streaming. Netflix has the same problem.

You can listen to this podcast here or at iTunes and Google Podcasts.


Related articles:

From the Concept Library, concepts for this article are:

  • Economies of Scale: Purchasing Economies
  • Economies of Scale: Fixed Costs
  • Digital Operating Basics

From the Company Library, companies for this article are:

  • Amazon
  • Netflix

Photo by Christian Wiediger on Unsplash


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2 thoughts on “Amazon’s Moat in Ecommerce is Growing. But Falling in Video. Just Like for Netflix. (US-Asia Tech Strategy – Podcast 125)

  1. Gregory Speicher

    May 27, 2022 at 2:54pm

    Very interesting article and pod. Jeff, I would love to have your analysis of Prime Video not as a standalone streaming video service (as you do in this pod) but as a part of the Prime Bundle. If this is its aim, then Prime Video should be evaluated in more of a “jobs to be done” framework, i.e. is it serving to grow and retain Prime subscribers? Jeff Bezos wants Prime to be so valuable that it would be irresponsible to not be a member. Of course, this also raises other questions for Amazon such as: what is the appropriate level of spending and how do you measure effectiveness?. This seems particularly pertinent as the market shifts focus to cash flows in light of rising interest rates.

    To the degree that Prime Video exists to serve the Amazon bundle, it would seem to be a further problem for Netflix in that Prime’s fixed costs can be evaluated against eCommerce spending rather than subscribers per se.

    As a parting thought and related to substitutes, the pending arrival of the new Warner/Discovery streaming bundle with must-see HBO shows and endless hours of low cost Discovery programs seems to only up the pressure on Netflix. This is on top of YouTube with very low/no cost production and gaming, which Hastings has already correctly identified as a substitute.

    • jtowson

      May 29, 2022 at 5:51am

      yeah. Amazon prime is interesting. For ecommerce, we can view it as a B2C switching cost. it locks in consumers. A competitive advantage (level 2).

      But bundling ecommerce plus video, I consider that a soft advantage, which is Level 3. Weaker but still valuable. For bundles, i think about whether they are integrated or not. integrated bundles (like Adobe), where the functionality improves with more bundled services are more powerful. The video and prime bundle are not really integrated. So weaker.
      I think we are going to see a lot of innovation in OTT bundles. Netflix is a basic tons of content for cheap bundle. I think there are lots of other plays for content bundles (small volume, high quality?)

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