Crowdsourcing content war rages on as Amazon enters the fray

Published 11-MAY-2016 15:45 P.M.

|

4 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.


Click Here to View Latest Articles

Amazon has surprised market analysts by announcing a crowdsourcing platform for video content. Amazon Video Direct (AVD) was launched yesterday and allows creators to upload their own videos to Amazon’s Prime Video and generate royalties on the hours streamed.

Created videos can be played on any Amazon Video-capable device which includes mobile phones and tablets (Fire, iOS and Android), desktop, game consoles, connected TV platforms, and Fire TV.

Creators have several options to monetise their videos, including making them available to rent or own, or they can make them free and ad-supported. The videos can also be packaged together and offered as an add-on subscription to Amazon Prime Video.

In a bid to attract marketing partners, Amazon says its Prime Video addition reaches “tens of millions” of people, spread across countries where Amazon Prime is currently available: the US, Germany, Austria, United Kingdom and Japan.

One of the most interesting features of AVD is the ability to deliver real-time performance metrics for all content held on the platform. All created videos generate key metrics which users can use to drive marketing/promotion or make real-time changes in response to web traffic. AVD’s performance metrics include:

  • Number of minutes a video was streamed
  • Projected video revenue
  • Full payment history
  • Total number of subscribers

Comparing businesses and contrasting models

Amazon’s AVD business model mirrors that of other crowdsourcing platforms including Newzulu (ASX:NWZ), Periscope and Meerkat – all of which give users the ability to generate and upload content to be shared with other users.

Whereas Amazon, Periscope and Meerkat are firmly headed into entertainment/populist genres that show off people’s talents and abilities; NWZ is heading for the factual news genre that aims to break the latest news stories and rubbing shoulders with the world’s largest news agencies. Its platform also has in-built video verification tools and editing detection to prevent fakes.

So far, crowdsourcing business models have been slow to gain traction although this is gradually changing as more businesses turn to user-generated content for their ads and marketing materials. The tide is seemingly turning as large news organisations begin to make their stakes and position for a future where content won’t necessarily be created by traditional means. Just recently, Seven West Media pulled the trigger in acquiring a significant stake in NWZ and is now a cornerstone investor.

Crowdsourcing stars and Megastar Millionaires

If AVD is a motorcycle, then the AVD Stars program is its side-car.

Amazon is also venturing into online talent contests as part of its crowdsourcing move. AVD Stars gives video creators a share of US$1 million per month based on customer engagement with their video. All videos posted on AVD are automatically enrolled into the contest.

Amazon plans to distribute a monthly bonus only for creators, from its $1 million monthly fund, based on the Top 100 AVD titles in Prime Video, in addition to any other revenue earned.

“It’s an amazing time to be a content creator,” said Jim Freeman, Vice President of Amazon Video. “There are more options for distribution than ever before and with Amazon Video Direct, for the first time, there’s a self-service option for video providers to get their content into a premium streaming subscription service. We’re excited to make it even easier for content creators to find an audience, and for that audience to find great content.”

Jim Freeman, Vice President of Amazon Video

Amazon’s move echoes a very similar proposition being made by ASX-listed upstart, MSM Corp (ASX:MSM). MSM is a technology and entertainment company focused on talent discovery and online participation of entertainment content.

MSM’s flagship product offering is the Megastar Millionaire venture which connects artists and performers with their fans as part of an interactive ‘gamification’ experience capturing multiple audiences, from all age groups.

The Megastar Millionaire platform looks to monetise the recent attraction of talent-search TV programmes such as ‘X-Factor’, ‘American Idol’ and ‘The Voice’ by embracing online video, online gaming and social media as part of the user experience.

MSM’s ambition is to reach and surpass existing talent-search variants that do not take advantage of the surge in online participation. ‘American Idol’ is exclusively broadcast to TV viewers in the US, and is currently valued at US$2.5 billion (A$3.6 billion).

Megastar Millionaire is due to launch later this year also offering a $1 million prize, but presented to one final winner.

Critics beware

Those doubting the reach of individuals and their ability to compete with giant multinational film crews, spare a thought for Destin Sandlin, Ingrid Nilsen and Adande Thorne. This trio collectively operates a run-of-the-mill YouTube account, yet have managed to attract 10 million subscribers and made headlines in January by interviewing Barack Obama live from the White House.

The rise of the ‘online star’ continues.



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.

 

Discover Small Cap
Biotech Stocks

Join thousands of other Investors following our stock commentary for Free

X