Amazon.com, Inc. (NASDAQ:AMZN) will do what it can to challenge any firm that has a billion-dollar market cap – even Youtube! The latest tech firm with a target on its back is, YouTube, one of Alphabet Inc (NASDAQ:GOOGL)‘s greatest assets . The online retail giant just introduced Amazon Video Direct, a platform that allows users to upload videos and earn royalties from that content. It sounds like 2005 all over again.
Amazon.com, Inc. Launches Video Direct
Amazon.com, Inc. (NASDAQ:AMZN) is moving into the world of online video in an attempt carve out a piece of what YouTube has grown since it launched way back in 2005.
On Tuesday, the firm launched a brand new web service. It lets users upload videos and earn royalties from them.
Known as Amazon Video Direct, the service allows uploaded videos available to rent or own. Visitors can also view these videos for free with ads. The firm will also offer videos to be packaged together and marketed as an add-on subscription.
Content creators may not be interested in abandoning YouTube because of the royalties. The firm will pay content producers half of the revenue earned from sales or rental receipts. Or, for videos that have ads in them, the content creators will receive half of the net ad receipts. YouTube takes 45 percent of ad revenues.
It noted that the platform has been established for professional video creators. However, the online retail giant only requires its users to upload high-definition videos with closed-captioning. So pretty much anyone can upload videos to the platform.
For now, Video Direct is only available in the U.S., Germany, Austria, UK and Japan.
The website is already doing an impeccable job competing with Netflix, Inc. (NASDAQ:NFLX) by investing in Amazon Prime Video. Can it mimic that same level of success and combat YouTube? It’s hard to determine since it has been the go-to arena for video consumption on the Internet for more than a decade.
Who knows? In the next several years, young people may wane from saying “YouTube it” to “Amazon Video Direct it.” But experts are cynical that Amazon could ever compete with YouTube because the latter already has more than two billion users.
Investors seem excited. Amazon shares are up three percent to more than $700 during Tuesday’s trading session.
Can Amazon.com, Inc. Make a Splash in the YouTube Ecosystem?
Amazon may be unable to disrupt YouTube or other similar services. However, it may have an appeal for the tech firm’s 50 million Prime subscribers.
To grasp just how big YouTube really is, here are a few statistics that the firm will have to compete with (courtesy of Expanded Ramblings):
- Four billion videos are viewed each day.
- Six billion hours of videos are watched every day.
- YouTube’s global net ad revenue is $4 billion.
- More than 300 days worth of YouTube videos are viewed on Facebook daily.
- The average number of YouTube mobile video views per day is one billion.
What Amazon has in its favor is its infrastructure. With billions of dollars in hand, Amazon Video Direct could become a success. However, YouTube became the success it is today because of organic growth and digital word-of-mouth.
In the end, this venture may likely just turn a profit for Amazon.com, Inc. (NASDAQ:AMZN), but not make a splash to unseat YouTube as the king of online videos. With that being said, with all of the tech giants launching their own online video platforms, YouTube’s market share could shrink in the coming years.