Digital Media

In 2005, Amazon moved into digital content by releasing an online service that allowed users to browse and purchase specific pages or chapters of books before physical publication (see Exhibit 3c). This service evolved into a preliminary e-book purchasing service which allowed users to buy short stories and chapters of books. In 2007, Amazon launched its Digital Text Platform which provided authors with the ability to self-publish. Authors received 70% of the royalties from the sale of these e-books, retained rights control, and could see their e-books available on Amazon’s site within 24 to 48 hours of submission. Amazon also operated its own publishing arm, Amazon Publishing, started in 2009, with 14 imprints focusing on diverse genres. By 2011, Amazon was selling more digital books than physical books. By 2017, Amazon accounted for 83% of the US e-book market.
In 2006, Amazon partnered with all of Hollywood’s major film studios except Walt Disney and released a service called Amazon Unbox that sold movies for download for $7.99 to $14.99. This offering included new releases and popular television shows. In 2011, Amazon launched Prime Instant Video, a video streaming service with 5,000 titles free to Prime members. The same year, Amazon completed the acquisition of Lovefilm, a UK-based DVD rental and online video company in which it had first invested in 2008. In 2018, Amazon Prime’s Instant Video was the second most popular video streaming service in the United States, behind Netflix and ahead of Hulu.
In May 2007, Amazon purchased Brilliance Audio, the largest independent publisher of audiobooks in the United States. Amazon also began negotiating copyright contracts and developing a digital- music store, which was launched in September 2007. The Prime Music streaming service, free to Prime members, was launched in 2014. In March 2018, Amazon Music was the seventh largest music streaming service in the United States with 12.7 million monthly users. The leaders were Apple Music with 49.5 million users and Spotify with 47.7 million. In March 2019, eMarketer reported that Amazon Music was on pace to grow faster than any other audio streaming service and cross the 35 million monthly listener threshold by the end of the year.
In 2010, Amazon launched Amazon Studios to begin producing its own content. In 2013, it released 14 original pilots of television shows. The next year, it released Transparent, an original series that garnered Amazon Studios its first Golden Globe awards. The 2016 Amazon Studios film Manchester by the Sea became the first movie from a streaming service to receive an Academy Award nomination for Best Picture. In November 2017, Amazon Studios made headlines again, when it purchased the rights to a Lord of the Rings spinoff for $250 million. Amazon also released the hit comedy The Marvelous Mrs. Maisel in 2017, which went on to receive 8 Emmy Awards, including the 2018 Emmy Award for best comedy series. In 2019, Amazon was set to spend nearly $6 billion on original content, compared to Netflix’s $15 billion.
In 2011, Amazon launched the Amazon Appstore for Android with 3,800 apps. The Google Android Market offered 200,000 apps at the time. By early 2019, Amazon’s offering had expanded to 475,000 apps. The Google Play Store offered 2.1 million. Apple offered 1.8 million.
In 2014, Amazon acquired Twitch, the world’s leading gameplay streaming site, for $970 million in cash. The site allowed gamers to share videos of their more interesting game moments and even earn a living from doing so. Competitors included HitBox, Beam, Azubu, Bio Live, and YouTube Gaming. Twitch was founded in 2011. Google’s response, YouTube Gaming, was launched in 2015.91 In 2019, Twitch attracted 15 million daily users, with an average of 1.27 million concurrent viewers.