Amazon CEO Questions Spending, Threads Takes On Twitter
1. Amazon CEO Questions Spending
So it seems that Amazon’s new CEO Andy Jassy has been going through the books and wondering why the company’s relatively buzz-free TV shows are costing him so many hundreds of millions of dollars.
It’s not an unfair question, given Amazon’s oftentimes puzzling relationship with Prime Video, but it can also be seen in a broader context as questioning the entire economics of the streaming industry today.
Because, as you may have heard me say several dozen times before, without the tens of billions of dollars generated by carriage and retrans fees, the industry is going to have to get used to a less fiscally carefree existence. Streaming can still be a very profitable business, but it will never be as wildly profitable as it was in the 90s, 00s and much of the 2010s.
Adjusting to this has been tough, and there has been a lot of lashing out at anyone who attempts any sort of financial discipline.
So that’s one side of what’s going on here, and then there’s the other, which is around the intersection of content and social class.
The OG Amazon content chief, Roy Price, created a bunch of acclaimed hits— Mozart In The Jungle, Red Oaks, Transparent, Sneaky Pete, Manchester By The Sea. But he was accused of making programming “for the Silver Lake crowd” (an early iteration of 2023’s “snobby shows nobody watches" line) and was replaced by someone with more of an eye for the mainstream.
And so the argument is that Amazon is trying to reach middle America, not HBO and Price’s coastal elites. So of course the New York Times is not going to devote half the home page to one of its shows.
That’s an argument we’re going to see play out a lot across the landscape over the next few years as streamers finally figure out that the market cannot accommodate six HBOs and that just because none of your friends like family sitcoms, that doesn’t mean there’s not a market for them. (You just can’t spend $5 million an episode on one.)
But getting back to Amazon and its many tribulations, we really need to discuss the interface.
Why It Matters
Ask any of your non-industry friends about Amazon Prime and I will guarantee you three things:
They have no idea why some shows are free, some cost money to rent and some come with a “watch for free with ads” option.
They have no idea that Amazon has a separate FAST service called “Freevee”
They have no idea whether they subscribe to Amazon for the video programming or for the free two-day delivery.
This of course means that people don’t really value Prime video as much as they do other streaming services, but it’s also why they are unlikely to cancel it. Because I strongly suspect that if all Prime Video offered was a bunch of movies to rent and a bunch of 1980s reruns with ads, their subscriber numbers would not see any major fall-off.
Something you most definitely could not say about Netflix.
So there’s that and it makes the original programming on Amazon a nice to have rather than a must have.
Which is why Jassy is right to be questioning all that spending. Because what Amazon really should be doing is finding programming it can make the most money off of—shows it can sell to other services for syndication rights down the road. Shows that can run for 100 or more episodes, a number that is getting increasingly rare these days.
There’s no benefit from high profile programming because no one is going to subscribe to Amazon strictly for the ad-free shows.
That, and Amazon has the most amazing set of data on its viewers—they know exactly what you bought, often over a 10 or even 20 year period. So why not double down on shows that let you make use of that ad revenue.
Or, if you want to go the “snobby shows no one watches” route, double down on it. Go back to shows like Transparent and Fleabag and even Goliath and Mrs. Maisel. Shows that at least get the New York Times and New York magazine talking about you.
It’s the middle ground that makes no sense.
What You Need To Do About It
If you’re Amazon, I’ve just given you all kinds of crazy good advice. Let Prime Video be yet another money making venture. Because at some point the US government is going to come after you and break you up, and it will be you and not Alphabet or Meta because they are politicians and they don’t understand what those companies do, but you sell things and they understand that.
If you are one of the other streaming services, remember that creating mass market content is its own art form and that there was a reason that network programming chiefs like Fred Silverman got paid so much back in the day. If you want to go that route, you need to go all in and not look down your nose at it.
If you’re one of the people doing all the cutting and questioning that needs to be done as profits shrink from mega to jumbo, chin up. There’s going to be a lot of griping and name calling and all that, but in the end they will realize that what you are doing is preferable to bankruptcy.
2. Threads Takes On Twitter
It seemed to happen overnight.
There were a couple of speculative, clearly planted articles early in the week that noted that Meta “might” launch its Twitter competitor “Threads” sometime this week, and then boom, there it was.
Clearly this had been in the works for a while—it’s not as if a company like Meta does anything spontaneously—but even still, the result was impressive.
Multiple celebrities (Oprah, Kardashians) were already on there as was just about every major publication from People magazine to Politico. (That’s just the Ps.)
I will admit to being initially skeptical as merging Instagram and Twitter did not seem like a logical fit. Like most people, Instagram is a place I connect with friends and family while Twitter and LinkedIn are more about work and I was not sure how the two would mix.
So far so good though and Threads has reportedly already signed up 30 million people on day one, enough so that Musk is already threatening to sue them.
But will it actually be a Twitter “killer”?
Why It Matters
The thing with any public facing platform is that there are only so many people who are willing to say anything in public, even if that thing is “Today is Friday.” Add to that the chilling effect of years of people being abused on Twitter for seemingly harmless comments and you’ve got a couple of hurdles to get over before your great-aunt is signing up for Threads.
Still, it’s got a lot of things going for it.
Real Names: People need to sign up with their real name. Or at least go out of their way to create a fake name. But given that much of the trollery on Twitter was done by people who masked their real identity with names like “AmerikaLuvr76”, it’s a big step in the right direction.
Your Actual Social Graph: As I learned in playing around on Bluesky, where Evan Shapiro and I were the only people who talked to each other, social media can be lonely when you don’t know anyone. That was always the problem with Twitter—most people got there, realized they didn’t actually know anyone and wound up following a bunch of celebrities, sports teams and news sites, which made the whole thing not very fun or interactive.
What’s more, having your personal social graph being able to see everything you post may discourage bad behavior. As in, do you really want your grandmother to know that you are the person harassing an elected official for sport?
No Porn: If you’ve ever been the parent of a teenager you are no doubt aware of the vast amount of hardcore porn that lives on Twitter. Granted it is a seemingly effective way for adult entertainers to promote their services, but there’s a lot of it and it does sort of set a tone.
No Bots. Well hopefully no bots, anyway. One would think that Zuckerberg would have spent a good deal of time and effort figuring out to put an end to both the malicious bots and the “buy 1K followers for $10” type bots, but one would think a lot of things about Zuck that don’t turn out to be true. (Did he get full depth on all 300 squats and did he kip any of those 100 pull-ups or did he do them all strict? But I digress.)
Meta’s Ad Network. Not too hard to figure out the advantages of that one. But still, it makes it easy to monetize something that Twitter has struggled to monetize, even pre-Musk.
Meta’s Uncanny Ability To Sincerely Flatter Other Social Platforms. Imitation is the sincerest form of flattery, right? And from Stories to Reels, Meta has proved exceedingly talented at flattering its rivals.
The AI Wildcard. There’s a theory that Threads will help Meta build a database of knowledge it can use to feed generative AI engines. I’m willing to bet the thought has crossed their mind. Whether they can put it into play in a meaningful way is another story, but it’s definitely a factor of sorts.
What it really comes down to though is how much of a desire there still is for a social social media. One where people interact with each other rather than just observe. And whether that need is from those of us over 40 or whether it’s a more universal thing.
What You Need To Do About It
If you’re Zuckerberg, I’d focus on keeping the platform as free of bots and harassment as possible. Hope that the social graph pressure stops people from getting into political battles of all sorts. In the best of all possible outcomes for you, that is what Twitter ultimately becomes—a place for angry anonymous people to screech at each other about kids playing on their lawns.
If you’re a brand or a TV network, this is a good time to take advantage of the honeymoon phase people are having with the platform. Just remember that what is true on day one may not be true on day 100.
And one final request: If you’re the sort of person who was a metaverse expert last month and an AI expert today, please wait a week before putting out your “10 Best Tips For Monetizing Threads” post.
Provided, of course, you haven’t already written one.
