One of the cornerstone themes of change that I outline in “C-Scape” is the growing need for every business to produce quality content, whether it’s information, entertainment, something tangible, or even any kind of “experience” . The point is, with the methods of distribution collapsing the only way you can insure a place in the marketplace is to produce a differentiated product that is better than others.
In the past, you were more able to stay in business just by having superior distribution. If you had more bookstores, more people were likely to pass through your doors to buy the same book that every store carried. Today, with Amazon on every computer, being in every store didn’t help you as much because anyone could order the book from Amazon wherever they were.
But now Amazon, which became a dominant bookseller by beating everyone else to selling books on the Internet, is now itself coming under the pressure of competition from several other Internet booksellers. The Internet is a fickle partner. There are practically no barriers to entry for new “distributors” of content. Once someone has an e-commerce platform, and can draw an audience, they can sell anything they want. It wasn’t a surprise that Apple would branch into video and even books through its ITunes platform.
So how has Amazon responded? Exactly the way C-scape suggests, it has expanded the products it sells through it’s e-commerce platform and now it is moving toward creating its own content. First, it began to sell much a much wider set of products. Now, it is going to use its relationship with millions of consumers to create it’s own content. In much the same way Comcast is expanding beyond it’s core business of distributing television programming by buying NBC and its several cable channels, Amazon is moving to own some of the content it sells.
Amazon has announced the creation of Amazon Studios, a business that will offer millions of dollars in prizes to the best efforts it gets from aspiring movie makers and screenwriters. And, it will produce and distribute the best of the work it gets in through this crowdsourcing.
It’s a traditional business model. Amazon painted the business strategy as simple. “We make money when we make great movies,” spokeswoman, Cat Griffin told the NY Times blog Media Decoder. Left unsaid is the fact that archrival Netflix is rumored to be considering a move into content creation. So this move is as much a defensive one as offensive.