So far, Amazon’s
(NASDAQ: AMZN) ventures with its Kindle tablets and Prime video subscription service has been moderately successful, but the company knows that true success will come by increasing consumer appeal. Amazon’s ventures face stiff opposition from arguably two of the most well-established brands in the tech-media world, Apple
(NASDAQ:AAPL) and Netflix
(NASDAQ:NFLX), so it should be no surprise that the company will need to do more than deliver on value to compete.
This may be why Amazon recently decided to launch a Kindle subscription service for kids. The new Kindle Freetime Unlimited service
offers e-books, games, and videos aimed at children ages three to five, at a cost of $4.99 per month, with a discount to $2.99 per month for Prime members. The service won’t feature ads and will block social media sites and other potentially controversial material from the viewer, ensuring that the service is child-safe. In addition, parents are allowed to freely customize what their children have access to and how much time they are allowed to spend watching videos, listening to music, or reading books.
At first glance, these changes seem to be geared toward make Amazon’s Kindle a preferred purchase for parents, but an article from CBS MoneyWatch
suggests that Amazon may have ulterior motives. As companies increasingly compete to stabilize their platforms within the growing streaming media industry, the key to victory seems to be attracting and keeping a large group of customers. As such, Amazon seems to be trying to cultivate loyal customers by getting to them in their formative years on the assumption that they will stay with the company into their adult years.
This strategy has worked well for many companies, including Apple, whose consistent appeal among educators has always been a source for new loyal customers. Amazon’s rival Netflix has also considered the value of appealing to the youth. Netflix’s recent acquisition of the exclusive rights to stream content from Disney
(NYSE:DIS) may not only solve a few of the former's recent troubles, but will also win it serious appeal among parents who want to show their children classic Disney movies, Marvel studios films, or even Star Wars.
Competing with Disney will be hard for Amazon, as its video service seems to be weaker than that of many of its competitors, but when bundled with Amazon’s many other services and products, the new focus on kids widens the company’s consumer base. Still, Amazon may want to try and secure deals with other media companies like Viacom
(NASDAQ:VIAB) or Warner Bros
(NYSE:TWX), or else run the risk of being cut out of the streaming business.
At the moment, Amazon is the best-known name in online retail, but its going to take a lot of planning and strategy if the company wants to parlay that success into media streaming.
No positions in stocks mentioned.