New Amazon Video Offerings Fulfill Bezos' Vision of 'an Everything Store'

05/31/2016 04:26 pm ET Updated Dec 06, 2017

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If there's one thing about Jeff Bezos that's clear, it's that he has the rare entrepreneurial ability to see around corners. Add a solid operator's skill to execute on the vision, and Bezos has a rare mix of drive and execution that makes his focus on video worth looking at with a long view.

The initial concept for Amazon was "The Everything Store" back when Bezos conceived of the idea. And in many ways, he's delivered exactly that. Amazon is often the first stop consumers arrive at on the web, and with Amazon's focus on building distribution centers and overnight shipping, it has turned the e-commerce and retail businesses upside down.

In web infrastructure, Amazon's Web Services business has moved with solid determination and offering low price services and solid, reliable infrastructure. The result is that it has become the leader in the 'on demand' web tech services business.

Video has been a relatively new addition to the Amazon portfolio. As recently as 2011 - Amazon wasn't in the video space at all. And when Amazon added free video into the Amazon Prime offering, it was easy to see video as more of an afterthought than a large strategic initiative.

After all, while consumers had to pay Netflix or HBO for access to their monthly service, Amazon's video gift on top of the free shipping from Prime. A good deal for sure, and hard to categorize Amazon as a video competitor when its customers weren't paying specifically for a video service.

Well, as of the launch of Amazon Video Direct, those days are long gone. Amazon has entered the video field in a big way, and it shows no sign of slowing down.

Amazon Video Direct is open to any video creator and offers a variety of economic incentives to monetize video assets. That makes AVD a competitor to YouTube, Vimeo, and Facebook for sure - but also makes AVD an insurgent player in the Online Video Platform market including Brightcove, Ooyala, Kaltura and JW Player.

Amazon Video Direct offers four distribution options. You can: 1. Make your content available to Prime Video subscribers on a per-hour royalty fee, 2. Sell content as an add-on subscription through the Streaming Partners Program, 3. Make your content available for rental or purchase, 4. Offer it free with ads.

The free ad-supported offering will provide the same revenue share as YouTube: 55%. But it's unclear how Amazon will get ads to serve, as before this offering Amazon hasn't been in the ad-supported content business. For distributors who choose Prime Video distribution, Amazon will pay 15 cents per hour streamed in the U.S., which isn't going to generate significant income for content owners in the near future. But they did add in an incentive for stars - a bonus pool of $1 million each month to recognize the top-performing video creators.

"There are more options for distribution than ever before and with Amazon Video Direct, for the first time, there's a self-service option for video providers to get their content into a premium streaming subscription service," Amazon Video VP Jim Freeman told Variety "We're excited to make it even easier for content creators to find an audience, and for that audience to find great content."

Amazon is placing some bets here - hoping it will entice creators to bring new quality content into the Amazon Prime ecosystem - with little risk to Amazon, which, has been able to leverage its investment in AWS to support platform infrastructure.

And while the initial press was quick to report Video Direct as a YouTube competitor, a quick test of the service reveals some inherent complexity that will make it unattractive to all but the most serious video players.

When you log into AVD for the first time (videodirect.amazon.com) you're immediately asked for three things that will disqualify all but the most established players. Amazon asks for your bank account routing number, your employee identification number (EIN) and your existing Amazon account. Then once you've handed over these details, you find that to upload a video you need an array of marketing materials, property configured thumbnail images and captions.

Captions you say? Isn't that something that is required by the FCC for Broadcast Video? Yes. And does YouTube require captions? No, it doesn't. Neither does Vimeo. Amazon explains it this way: "Amazon Video Direct requires most videos published through Amazon Video Direct to have captions. Amazon is a customer-obsessed company and captions help ensure a consistent viewing experience for all customers, including those who may be hearing-impaired, are non-native English speakers, or prefer to view videos without sound."

And while it does say "most" it's unclear what that means as all uploads won't complete without a CC file included in the upload form.

That means to get on Amazon you'll need to meet the following specifications: have an SCC with a .scc file extension, SMPTE-TT (RP-2052) with a .xml file extension, EBU-TT with a .xml file extension, DFXP Full/TTML (Timed Text Markup Language) with a .dfxp file extension, iTT (iTunes Timed Text) files with a .iTT file extension or, if you have closed captions DFXP Full / TTML (Timed Text Markup Language) with a .dfxp file extension, iTT (iTunes Timed Text) files with a .iTT file extension. iTT is a subset of TTML, version 1.0, or SubRip with a .srt file extension.

If all that makes your head hurt, you're not alone. Amazon clearly isn't going to get any cat videos or family home movies, and that may well be the purpose of this requirement. Serious video makers should probably already have created captions for their videos-or Amazon at least thinks they should.

So what's the real play here?

James McQuivey, vice president and online video analyst at Forrester Research, told Wired: "Minutes per day translates to more dollars per week. It's HBO meets Walgreens."

It comes down to this: while YouTube can show you ads for products, only Amazon can show you an ad, and with a click deliver that product to your front door the next day. The "Everything Store" indeed.