Bezos: the new content overlord

It’s entirely possible that we will one day live in a world that is owned and controlled by an impossibly small amount of people.

We’re already trending that way, but I’m not talking about the 1% here. More like the 0.0001%. Like, 4-5 people that own all the resources and are 1,000x more powerful than any politician or business executive in history.

That may sound like the plot of a Science Fiction novel, but is it that far fetched? You might argue that people will fight back to stop such a consolidation of power, but the evidence suggests that the transition to this world will happen so gradually that by the time it has fully arrived we will scarcely notice the difference.  

A sort of death by a thousand cuts situation, rather than by a single hammer blow. That is if it even is “death.”

The other side of this gradual transformation is that acceptance of the changing reality will mean that the move to monopolistic enterprise will be tempered with little conveniences that will make the changes palatable for people.

To continue the Science Fiction analogy, the future will be more Brave New World than 1984. Hopefully, the Soma is cheap.

This week we have seen another step in the process of this consolidation of wealth and products when Amazon dropped $8.45 billion USD to acquire MGM. The deal will give Amazon a massive amount of movies and television programs that it can now offer to Amazon Prime users — more than 4,000 films and 17,000 TV shows, actually.

The purchase, which had been rumoured for a while, caused Amazon stock (NASDAQ: AMZN) to rise slightly from a $3,274.59 open to $3,283.43, at the time of writing. However, the gains are more pronounced when you back things up to Monday, when the rumours started. Amazon started the week at $3,202.00.

MGM (NYSE: MGM) is also up from $42.20 at open today to $42.48 at time of writing, and from $39.71 at the start of the rumour.

On the surface, it may seem like an odd choice for what is, at its root, a retail company. But, as we all understand, Amazon is a lot more than the bookseller that Jeff Bezos started back on July 5, 1994.

No, Amazon has evolved into something that can’t really be defined. Sure, it’s a store, but they sell a lifestyle and much as physical things these days. Entertainment content fits into that lifestyle idea and, when you think about it in those terms, it makes perfect sense that Amazon would want to do this.

If you keep people on your platform for longer periods of time, they are more likely to spend more money on the platform. It’s basically the same idea as a casino holding a concert or boxing match. They may not make that much money directly off of those things, but the people that Watch Britney Spears “sing” or Tyson Fury punch someone are also likely to throw some money down at the Blackjack table.

And, if you’re watching Casino Royale on Amazon Prime on a Sunday afternoon you might just order that new BBQ you’ve been eyeing there as well.

It’s easy and convenient and that allows you to overlook the lack of competitiveness in the marketplace. In that scenario paying $8.45 billion for the content is a small price to pay to take one more step towards global dominance..