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These hypothetical splits show the perils of having outsiders (including regulators) make decisions like these. Just some quick notes: > You don't need the ret

by runako 4y ago

These hypothetical splits show the perils of having outsiders (including regulators) make decisions like these. Just some quick notes: > You don't need the retail arm any more [...] spin off the media company, comprising Audible and prime video, to make a Disney competitor The whole point of the conglomerate model they use (following Costco) is that the membership fee grants consumers access to a bevy of services. The services may not work a la carte. Further, spinning Amazon media to become one of the weakest Disney competitors doesn't obviously enhance competition or consumer welfare in media. > Spinning off the loser (Facebook), and the non-social networking product (WhatsApp) would let Instagram grow wings against TikTok. The "loser" (Facebook) generates most of the revenue and profit at Meta. The Google analysis arrives at a viable conclusion (the ads business could be run as a utility), for the wrong reasons. (For ex: Search/YT would not get a bigger premium by treating as first-class other, weaker, ad networks. The near-monopoly is what drives pricing power and is frequently a reason cited for forcing a hypothetical breakup.) Anyway, this stuff is not obvious or easy, even assuming people can agree on goals (which is difficult).

vidarh 4y ago
> The services may not work a la carte They don't need to. Prime could still offer Prime Video / Music as a membership perk. But if the media services are independent, maybe it'd turn out offering one or more of the others, or letting customer pick and choose, would end up making more financial sense (FireTV can already be used to subscribe to competing services in addition) I'm not saying it's necessarily a good idea - I don't have an opinion on that - but the bundling of services does not depend on them being part of the same company.
- runako 4y ago
  This misses the point. A breakup would put Prime Video / Music (are those two even allowed to be in the same company? Why? Who decides?) on the same footing as Hulu or Spotify. This would create independent third-tier players in both markets. The consumer would likely end up paying more (because Prime Video / Music can't be run at zero or negative margins as part of a bundle; ditto for other media options like Spotify). Further, I'm not sure what goal would be served by doing all of this and increasing costs to the consumer.
  - vidarh 4y ago
    Splitting it out as a separate service would not inherently stop Amazon from paying exactly the same amount towards Prime Video as it does today, and would allow the new company to seek additional customers unwilling to pay for the full bundle, so it's not at all a given that prices wouldn't go down. But even assuming that'd not be the case, anti-trust law is in large part aimed at ensuring competitors have fair access to the markets, not minimising costs to consumers. It's presumed that over time the former will ensure the latter and/or improve service, but it's really a separate issue. That said, I don't see a compelling anti-trust case for going after Prime Video anyway - there's plenty of competition in that space. However, there is also another possible cost reduction in forcing unbundling as well for those customers who don't want Prime Video, but want the other benefits. Not at all convinced it'd be worth it. That's not the part of Amazon that's a competitive issue.
madeofpalk 4y ago
> The services may not work a la carte If the service cannot compete on it's own merits, and is being propped up by an unrelated business, how competetive is it actually?
- runako 4y ago
  > the service cannot compete on it's own merits This is only true if external actors redefine "the service" to be something other than what millions of customers voluntarily purchase (Prime). For example, I subscribe to Prime because I get free/better shipping on goods as well as video. I don't know what % of my subscription fee I would allot to either, but fortunately I don't have to do that.
  - mulletbum 4y ago
    Not to mention, these other comments are for Disney. However, Disney is propping their business up with lots of other businesses. If you are going to make Amazon less competitive, you can't leave the giant business next to it in a better position. Disney will just buy it then.
    - runako 4y ago
      This is such a great point. Disney makes a lot of money in theme parks etc.; Walmart makes something like $42B annually in healthcare; Costco sells cars & travel packages; Kroger sells gas (petrol); Apple (also a competitor) makes most of its money selling phones. Why leave all those businesses intact and target Amazon?
    - runevault 4y ago
      Frankly among the not-tech-first companies Disney is the one that should most be targeted. The fact they were allowed to buy LucasFilms and Fox media (minus Fox News and Fox Sports because they already own ABC and ESPN) was so stupid. The year before those purchases the collected movies of those 3 were most of the top movies at the box office.
    - danaris 4y ago

by runako 4y ago

vidarh 4y ago

> The services may not work a la carte They don't need to. Prime could still offer Prime Video / Music as a membership perk. But if the media services are independent, maybe it'd turn out offering one or more of the others, or letting customer pick and choose, would end up making more financial sense (FireTV can already be used to subscribe to competing services in addition) I'm not saying it's necessarily a good idea - I don't have an opinion on that - but the bundling of services does not depend on them being part of the same company.

runako 4y ago
This misses the point. A breakup would put Prime Video / Music (are those two even allowed to be in the same company? Why? Who decides?) on the same footing as Hulu or Spotify. This would create independent third-tier players in both markets. The consumer would likely end up paying more (because Prime Video / Music can't be run at zero or negative margins as part of a bundle; ditto for other media options like Spotify). Further, I'm not sure what goal would be served by doing all of this and increasing costs to the consumer.
- vidarh 4y ago
  Splitting it out as a separate service would not inherently stop Amazon from paying exactly the same amount towards Prime Video as it does today, and would allow the new company to seek additional customers unwilling to pay for the full bundle, so it's not at all a given that prices wouldn't go down. But even assuming that'd not be the case, anti-trust law is in large part aimed at ensuring competitors have fair access to the markets, not minimising costs to consumers. It's presumed that over time the former will ensure the latter and/or improve service, but it's really a separate issue. That said, I don't see a compelling anti-trust case for going after Prime Video anyway - there's plenty of competition in that space. However, there is also another possible cost reduction in forcing unbundling as well for those customers who don't want Prime Video, but want the other benefits. Not at all convinced it'd be worth it. That's not the part of Amazon that's a competitive issue.

madeofpalk 4y ago

> The services may not work a la carte If the service cannot compete on it's own merits, and is being propped up by an unrelated business, how competetive is it actually?

runako 4y ago
> the service cannot compete on it's own merits This is only true if external actors redefine "the service" to be something other than what millions of customers voluntarily purchase (Prime). For example, I subscribe to Prime because I get free/better shipping on goods as well as video. I don't know what % of my subscription fee I would allot to either, but fortunately I don't have to do that.
- mulletbum 4y ago
  Not to mention, these other comments are for Disney. However, Disney is propping their business up with lots of other businesses. If you are going to make Amazon less competitive, you can't leave the giant business next to it in a better position. Disney will just buy it then.
  - runako 4y ago
    This is such a great point. Disney makes a lot of money in theme parks etc.; Walmart makes something like $42B annually in healthcare; Costco sells cars & travel packages; Kroger sells gas (petrol); Apple (also a competitor) makes most of its money selling phones. Why leave all those businesses intact and target Amazon?
  - runevault 4y ago
    Frankly among the not-tech-first companies Disney is the one that should most be targeted. The fact they were allowed to buy LucasFilms and Fox media (minus Fox News and Fox Sports because they already own ABC and ESPN) was so stupid. The year before those purchases the collected movies of those 3 were most of the top movies at the box office.
  - danaris 4y ago