Amazon Prime vs. Netflix Streaming Video Business Models

I have been using Netflix for years and we have all seen the train wreck from its decisions to modify its business model.  But, did Netflix really modify its business model or just try to change its pricing?

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I have been a loyal Amazon Prime subscriber as well.  I have a Kindle Fire so now it is much easier to watch Amazon Prime free streaming videos.  One the things that just hit me is the different business model for Amazon Prime than Netflix.

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With Netflix you pay for streaming and you get a bunch of free videos.  If you want videos not included in the free streaming you put a request in for the DVD.  So Netflix wants you subscribe to both streaming and DVD delivery.

Amazon Prime you get free videos. You find free videos, and when you don't see what you want there are a wide choice of daily rentals $.99 - $4.99 a day to watch a video.  If you know you like a video you can choose to buy the streaming content or buy the DVD.

Amazon is using streaming video to keep the eyeballs coming back to rent or buy content, operating like a retail operation.  Amazon Prime video is keeping the users coming back on a regular basis and trying to up sell the users.  There is a much bigger upside for Amazon Prime, than Netflix.  A fanatical Netflix user will choose the 5 DVD rental option with blu-ray,  but that same fanatic will incur a high monthly cost for postage, handling, and content.  A fanatical Amazon Prime user will rent and buy videos and almost certainly buy many more things on Amazon Prime's store.  The upside revenue for Amazon is much higher than Netflix.

And the beauty is Amazon Web Services is making money from Netflix operations as well.

Think of these business models as changing things were data centers are at the core of a strategy.  Streaming is also a much greener strategy than physical media.  How DVDs do you have sitting around your house?  Don't you wish they were all in the cloud on demand?

 

Cynical Gartner view of Microsoft, IBM, Oracle and SAP

Business Insider reports on a Gartner talk in Australia.  Warning: this is a bit of cynical view that you would guess Gartner did not want to spin in this particular way as Microsoft, IBM, Oracle, and SAP are clients of Gartner research.

So, what does the reporter say?

Microsoft is all about Windows and Office.

Microsoft mainly wants to protect Windows and Office. Microsoft is a platform company, and its main goal is to protect its highly lucrative Windows and Office monopolies, while establishing other platforms that will be hard for customers to break away from later. New functionality is "drip fed" to users of those core platforms, but new products exist to protect the core. He advised extreme caution before moving to Office 365, and said not to slip into an "all-Microsoft" mentality

Oracle products don't work together as advertised.

Oracle products don't really work well together. Oracle's sales force is extremely aggressive about pushing a suite of products, but has much fewer integration points than SAP. In fact, integration is usually left entirely up to the customer. Oracle is also very reluctant to talk about product roadmaps for fear that future products will cannibalize existing ones. The company makes more than 90% of its profits through maintenance fees, and will do whatever it takes to keep those fees flowing in. Gaughan also expressed some surprise that so many customers keep working with Oracle despite reporting that Oracle is "the most difficult vendor to deal with.

IBM wants to own your IT strategy.

IBM wants to take over your IT strategy. IBM bills itself as a thought leader, but its real business is selling consulting services. To thrive, IBM account managers try to take control of a company's IT strategy so they can keep pushing new products. Gaughan recommends taking a collaborative or partner approach

SAP confuses users with its pricing.

SAP confuses customers with pricing. A lot of SAP customers ask Gartner for help figuring out SAP's pricing and licensing, as SAP has unusual terms for billing data going into and out of systems. Gaughan also said that a big technology transition that was driving SAP revenue for the last few years -- moving existing customers from the old R/3 system to the newer Business Suite -- is almost done, which means SAP will have to be more aggressive with maintenance fees. He recommended locking in maintenance prices now.

And, the author closes with

Overall, Gaughan said that most of the innovation being done in these companies is in their research arms. Their real goal is protecting the status quo for as long as possible.

claiming the companies want to protect the status quo.

Facebook achieves LEED Gold Certification

Facebook has posted on their achieving LEED Gold Certification.

Prineville Data Center Receives LEED Gold Certification

by Prineville Data Center on Thursday, November 17, 2011 at 4:30pm

 

When we first envisioned our Prineville data center a couple of years ago, we knew we wanted it to be one of the most energy efficient in the world. To achieve this goal, we redesigned our entire physical infrastructure, from grid to gates, with a focus on squeezing out every possible efficiency. The end result: a data center that requires 52 percent less energy to operate than a comparable facility built to code requirements. And now we’re excited to share that all our hard work on the first phase of our Prineville facility has been recognized with LEED® Gold Certification from the U.S. Green Building Council.

Some of the details are shared.

In addition to its energy efficiencies, the Prineville data center includes many other environmental conservation features, both in its construction and in its use. Twenty-seven percent of building materials used came from recycled products, and 30 percent of materials used were locally sourced and manufactured. Ninety-one percent of the wood used was FSC-certified from sustainability-managed forests, and 83 percent of construction waste was recycled or reused, preventing 530 tons of waste from ending up in a landfill.

 

At the completed facility, 100 percent of rainwater is captured and reused for all irrigation and toilet-flushing needs, a savings of 272,000 gallons of municipally treated water per year. A solar energy installation generates an estimated 204,000 kilowatt hours per year, providing electricity to the office areas. The offices are even heated through reuse of heat created by the servers.

W Washington Renewable Energy Windfarm cancelled by 1 bird impact every 2 years, beauracracy wins

King5 reports on a Western Washington renewable energy project that was cancelled by the environmental impact to an endangered bird.

By Associated Press
KING5
updated 1 hour 15 minutes ago

RICHLAND, Wash. -- Plans for the first major wind farm in Western Washington have been canceled because of federal restrictions to protect a threatened seabird, the marbled murrelet.

Richland-based Energy Northwest and four southwest Washington utilities spent four years and more than $4 million trying to put 32 wind turbines on Radar Ridge near Naselle. The Tri-City Herald reports Energy Northwest announced the cancellation Wednesday at a board meeting in Portland.

And, the threat to the seabird occurs once every two years.

Energy Northwest says the U.S. Fish and Wildlife Service imposed "untenable" restrictions on the wind farm because studies showed one bird could have been harmed every two years.

I am sure there is some environmentalist who wants no harm to occur due to a renewable energy project feels like this is a win.  But, I think the real winner is the bureaucracy.

A bureaucracy is an organization of non-elected officials of a governmental or organization who implement the rules, laws, and functions of their institution,[1] and may be[weasel words] characterized by officialism and red tape.