October 4, 2018 4:10 pm
Scott Galloway’s book “The Four” is about tech giants Google, Facebook, Apple and Amazon and how they pose a threat to just about every other business on the planet. But he’s mulling a sequel, because he now thinks the first three need to fear the fourth.
“Amazon is beating up on the other three wherever it intersects,” said Galloway in a provocative speech to the Brandemonium conference in Cincinnati on Wednesday. Galloway, a New York University professor who is the founder of digital consultancy L2 (now part of Gartner) says Amazon is out-innovating Apple on hardware, has become the fastest-growing digital media player and outspends TV networks on original content.
“Amazon has more job openings in their voice group than Google has in the entire company right now,” he said. Amazon “can go into the media business and overnight be the second largest spender on original content. They will spend more than NBC or CBS this year.”
He says that’s all possible because of the advantage Amazon gets from investors willing to throw huge piles of cash its way, chasing growth without expecting much profit, which in turn means paying little corporate income tax and having plenty of capital to invest in everything.
Amazon did not respond to mutliple requests for comment.
Amazon’s much-hyped search for its second headquarters, which Galloway dubbed “the shit show circus of HQ2,” will only add to its unfair advantage, he said. “Amazon has gamified a contest in order to extract as much revenue from municipalities, school districts and fire departments” as possible, Galloway said.
As one of the two richest men in the world, Amazon Chairman-CEO Jeff Bezos won’t choose to spend “12 weeks a year” in Indianapolis or Columbus, Ohio, maintains Galloway, but will opt to headquarter Amazon where he already has a second or third home – New York or Washington D.C.
The latter will win, predicts Galloway, because of Amazon’s growing fears of government regulation. “Nobody is going to regulate the guy who throws out the first pitch at the opening game of the 2019 Washington Nationals season.”
Amazon runs well behind Google and Facebook in digital media, but Galloway says most estimates lowball its media revenue, which he expects to reach $11 billion this year, double that of Instagram.
One key to that has been Amazon’s ability to tap shopper-marketing funds, a bigger pool of money for consumer-goods companies than conventional media budgets. “Whereas Walmart and Target monetize only 1 percent of their searches, Amazon has figured out a way to monetize 16 percent,” he claims citing L2 research. He noted that comes largely from funds once spent on promotions with brick-and-mortar retailers.
While the growth of the digital powerhouses seems inevitable, antitrust enforcement could stop all the big tech players from “euthanizing” startups prematurely, said Galloway. Had the Justice Department not started antitrust action against Microsoft in 1999, Google probably wouldn’t exist, he said, and when people faced questions they didn’t know the answer to, “We’d all be saying, ‘I don’t know. Bing it.'”
Categorised in: Media and Technology
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