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Just read a sell-side note comparing legacy CPG / Amazon to legacy media / Netflix.
Half-baked Tuesday contrarian thought experiment: what would be potential reasons why Amazon private label might *not* ever disrupt CPG? Two come to mind for me:
Half-baked Tuesday contrarian thought experiment: what would be potential reasons why Amazon private label might *not* ever disrupt CPG? Two come to mind for me:
1) Lack of focus by Amazon
Aka the same reason why traditional private label didn't kill CPG
P&G is never building its own 2-day shipping infrastructure. Meanwhile, the media networks would've eventually built their own SVOD services; this was do-or-die for Netflix in 2012
Aka the same reason why traditional private label didn't kill CPG
P&G is never building its own 2-day shipping infrastructure. Meanwhile, the media networks would've eventually built their own SVOD services; this was do-or-die for Netflix in 2012
2) Physical products are not zero marginal cost (obviously)
The fixed nature of content costs is what enables the Netflix flywheel: more subscribers = more content spend = wider moat
Amazon private label has no obvious advantage along these lines; they're just another brand
The fixed nature of content costs is what enables the Netflix flywheel: more subscribers = more content spend = wider moat
Amazon private label has no obvious advantage along these lines; they're just another brand
On a related note, given the rise of challenger / "micro"-brands in CPG, I'm kinda surprised that niche content hasn't made a bigger dent on mainstream entertainment yet... yes TV ratings are falling through the floor, but the mega studios like Disney are doing better than ever
