Amazon is Becoming the True Publishing Vertical Business
So you think you know what Amazon is but think again as the global brand makes more media moves which although small show just how savvy the organisations. — The first announcement that Amazon.com is launching Amazon Studios.
Context & Ripple Effects
The Amazon Studios announcement caps an unusually dense fortnight of vertical moves by Amazon: within the past week alone it completed the Diapers.com acquisition, added BuyVIP.com to a multibrand retail roster that already includes Zappos, and — on the media side — launched the Kindle Publishing for Periodicals tool alongside 70-percent revenue-share terms for magazine and newspaper publishers.
What makes the Studios launch different from the retail deals is direction: rather than buying sellers or courting existing publishers onto the Kindle store, Amazon is moving upstream into creating media itself, putting it in the position of owning both the storefront and the content on it.
First-order effects
- Magazine and newspaper publishers get a lower-friction path onto the Kindle Periodicals Store via the new self-service tooling, with a 70-percent split that sets the economics they will judge every other digital distributor against.
- Filmmakers gain a development channel outside the traditional studio system, since Amazon Studios accepts and develops projects directly under Amazon's own banner.
Second-order effects
- Traditional publishers and Hollywood studios now face a counterparty that controls discovery, sales, and — increasingly — competing original content, pressuring them to weigh exclusivity against reach when dealing with Amazon.
- Rival device and storefront operators must match or beat the 70-percent periodical terms or risk losing periodical supply to the platform offering the better split.
Third-order effects
- If the pattern holds — Zappos, BuyVIP, Diapers.com in retail; Kindle tools and splits in publishing; Studios in production — the structural endpoint is a small number of vertically integrated platforms owning creation, distribution, and the customer relationship, with standalone intermediaries squeezed between them.
- Content owners' leverage would shift from controlling access to distribution toward negotiating terms with the few integrated platforms left standing, making revenue-share percentages the key battleground.
The trend: Media is consolidating around vertically integrated platforms that combine content production, distribution, and the direct customer relationship — with Amazon applying its retail-acquisition playbook to publishing.