Ask HN: Is Amazon “dumping” streaming video and should it be prevented?

18 points by danblick 8 years ago | 11 comments

From my understanding, Amazon doesn't currently make money off its Amazon Instant Video service.

Cheap, high quality streaming TV like this probably hurts (1) traditional TV channels, (2) online competitors like Netflix, and (3) any new companies trying to enter the online streaming market. On the other hand, consumers ought to be happy that their consumption is being subsidized (for now).

Is it fair to call this behavior "dumping"? At what point does "dumping" lead to anti-trust action by the government?

twobyfour 8 years ago |

And Uber is dumping taxi services by selling them below cost (subsidized by VC) to undermine the competition. Nobody's even tried going after them from that angle.

The US government, at least, basically doesn't enforce anti-trust regulations any more. And even if it did, the current administration's philosophy essentially doesn't include the enforcement of ANY regulations against businesses for the public good.

exikyut 8 years ago | |

> The US government, at least, basically doesn't enforce anti-trust regulations any more. And even if it did, the current administration's philosophy essentially doesn't include the enforcement of ANY regulations against businesses for the public good.

Yup.

2001: "Microsoft is abusing their power to ship their own Internet browser on PCs!"

2017: [Washington DC] "We'd like to place an order for 2,000 Chromebooks, please."

d0lph 8 years ago | | |

Those things aren't very similar.

jgowdy 8 years ago |

There’s a fine line here between dumping, bundling, and loss leading. Amazon bundles video with a Prime subscription. Not all customers under that promotion have to be profitable, and not all of them have to be profitable in the same way (based on usage pattern and the associated costs). Loss leading is also a legitimate technique to drive customers into the funnel for up sales.

For this to be properly considered dumping, Amazon would have to be intentionally putting price pressure on Netflix and Hulu by under pricing their offering significantly.

aidenn0 8 years ago |

IANAL, but in the US, this is one of the hardest anti-trust cases to make.

See e.g.

https://en.wikipedia.org/wiki/Predatory_pricing#United_State...

freeone3000 8 years ago |

It doesn't hurt #2 because, at least in the past, Netflix was actually cheaper than prime. It's still cheaper month-to-month.

Moreover, due to copyright and the existing streaming deals, any new companies trying to enter the online market will be selling a different product package. They'll have different shows, essentially selling a different service. It's not as if PBS or FoodNetwork have been "dumping" their video streaming services as a detriment to Netflix.

jotjotzzz 8 years ago |

No. If Amazon expects to sell their hardware, such as the Amazon Fire TVs, Echo, and their tablets -- they heavily market these services on those hardware and it is part of their benefits proposition. Now that YouTube is no longer on the Echo and on their tablets, they better keep it alive. It's also partly subsidized via Prime subscription.

cjbprime 8 years ago |

Isn't it part of a Prime subscription?

danblick 8 years ago | |

Yeah, you could argue, "Prime is sufficiently expensive and video streaming is a sufficiently large part of Prime that it's not dumping".

I can see that, it's possible. I mean, if Prime cost $1, it wouldn't be a good argument, but Prime is more expensive than that in reality. How much of the value of Prime is in streaming video (as opposed to free shipping)? It's hard to say (for an outsider at least, I'm sure someone at the company has run the numbers).

The gray area here does make the situation a little more confusing...

For the sake of argument, what if we suppose Prime costs $1/year and the value of free shipping is more than that. Would that be the kind of situation where the government would take antitrust action?

ggg9990 8 years ago | | |

The government won't take any antitrust action because its enforcement capabilities against corporations have been eviscerated. If the same people who prosecuted Microsoft were in charge today, there would be active lawsuits against ALL of the major tech companies. The book "Chickenshit" is a good one to read in this area.

Nexxxeh 8 years ago | | |

In the UK, Prime Video is not as good as Netflix.

Amazon's got some great flagship stuff here, Mr Robot, Vikings, Sneaky Pete, The Tick, and the now finished Black Sails for example.

But it is almost as expensive as Netflix if that's your primary reason for hooking up with Prime.

It would only work as a much cheaper product or as part of a bundle.