Amazon Takes a Media Content Stand in Profit Push

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June 12 (Bloomberg) -- Bloomberg’s Paul Sweeney and David Fannon, executive vice president at Screen Media Ventures, examine Amazon’s disagreements with movie studios and publishers as the company makes a competitive push in digital media distribution with Prime Music and original video content. They speak on Bloomberg Television’s “In the Loop.”

This is about publishers.

Amazon has been a company where investors have recognized and not worry about topline, it is all about margins.

That strategy is coming under extreme in -- pressure by shareholders that they want to see profitability.

One of the areas amazon is looking at is content cost.

With publishing and now with warner bros., amazon is trying to take a tougher stance with content partners.

David, what you make of this tougher stance?

It is not surprising.

Amazon has increase their revenue.

Their profit, right.

Their profit.

The prophet is one sent her dollar, i understand.

Is a typical dispute.

It is not that big of a deal.

They are only holding back reorders -- pre-orders for "the lego movie." it has been going on since the dawn of time.

When hbo started, they had their dispute.

It is cleared up now, and this will be the same thing.

Perhaps amazon feels they can do something like this because they have gotten big enough the media and content to do this?

On the publishing side they are the dominant player there, and on the video and even in the music side, it is getting increasingly competitive.

On the video side, there are a lot more streaming players in addition to netflix, hulu, and amazon prime, and google and apple are getting into the business.

Amazon is out there saying we are big, we are large, and we can drive pricing in this marketplace.

We are walmart, deal with us like that.

Exactly.

It is interesting, there are other walmarts out there.

Best buy has cinema now.

You can get reorders with a click of the button.

With walmart, they could change and say we will put you in the back of the store.

The consumer would be upset.

This is a good test for how strong amazon and their video business is because one click away i can go to best buy.

What about original content question mcdavid, that is up your alley.

How is amazon doing in original content?

They're not making as big of a splash.

Why not question the they -- why not?

They are not as competitive.

Netflix has been able to blow them away.

They fumbled through this.

Amazon prime is a great service.

Adding music will be a boom, but they are fighting universal music on this.

The original content is just not as compelling as what netflix has done.

Why is that question what is happening there?

Amazon -- why is that?

What is happening there?

Adams on -- amazon is not a media company.

Amazon prime members spend two times the average customer would amazon is nodding -- customer.

Amazon is not a media company.

Doesn't cost too much?

They do not have the chops to get into original content.

Netflix has made a huge investment.

Several billion dollars in original content.

There is no reason amazon cannot do it, but it is not their core focus.

It is growing pains.

You have to remember netflix try to do this with a company called red envelope doing original movie productions.

That failed miserably.

It is a growing pain.

Growing pains.

Hbo, the "first and 10" series was not that compelling and then it took them how many years to come up with "the sopranos," and other things.

Showtime, same thing.

Finally they have hit on their hands.

Netflix has done well with original content, "orange is the new black," and "house of cards," but the fight they have brewing with verizon, blame it on the isp, do not blame it on us -- how significant is that?

I find it interesting because they just signed this deal with verizon to get their servers.

I think they are unhappy with the deal.

With what they are paying?

Or the service they are getting from verizon and this is the way to warn verizon, fix your servers, give us better service, or this is what will happen.

They are not doing it to comcast.

They got a nice deal with comcast.

They did, but they got a nice deal with verizon.

The timing is interesting.

I think they are testing the waters.

It is interesting that netflix has gotten big enough or they are telling comcast and verizon what to do.

Right.

Thank you, guys.

David fannon, screen media ventures and also, paul sweeney of bloomberg industries.

I mentioned the twitter coo stepping down.

Our senior west coast

This text has been automatically generated. It may not be 100% accurate.

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