Amazon is the world’s largest online retailer. But Amazon competes on low prices, meaning the company’s profit margins are slim, leading to surprisingly small profits in relation to other tech giants. Amazon has come up with creative solutions such as cloud hosting through AWS and subscription revenue in the form of Amazon Prime. And while Prime has been great for customers, it’s about to get even better for sports fans with Amazon in talks to stream live sports… Why would Amazon streaming sports make such a big difference for the company?
What’s In It For Amazon When It Comes To Streaming Sports?
In 2015 Amazon produced just $92 million a quarter in profits. Or about $400 million in profits for the year. Other tech giants made significantly more. Google, for example, earned around $3.93 billion in profits per quarter. Ebay, another consumer site, netted $682 million in the final quarter of 2015. How is that one of the biggest brands in the world in Amazon earns so little in comparison to its peers? And how does Amazon change that fact?
Amazon has a reputation for quality, customer service, and price. And when customers can have something good, fast, and cheap, consumers flock to it. But the downside of that is low margins for Amazon. The online retailer has warehouses full of inventory from manufacturers, and earns revenues by acting as a distributor. Thus, Amazon stores the goods, ships the goods, and pays for the labor costs of doing all of that. Amazon’s main weapon to combat that is Amazon Prime. Members pay $10/month or $99/year (with college students receiving a 50 percent discount) and receive free expedited shipping, streaming movies, TV shows, and videos, and other rewards.
Although Amazon has to cover the cost of shipping, that money comes out of the subscription costs paid by members, who would have to order quite a bit to actually eat into Amazon’s profits there. And even then, those costs are offset by all the Amazon Prime members who pay their membership fees but never order anything delivered.
The real money comes in through the streaming videos, though. There’s no overhead there as far as housing and shipping, as with warehouses and warehouse workers. Millions of people can watch an episode of Mr. Robot simultaneously without any additional cost to Amazon. That’s the same reason Netflix invests in original programming. The more people paying monthly to watch the same piece of content, the more profit the company makes. Amazon has already announced it plans to build out its video content platform, doubling its video content spending on original content in the coming year. And now Amazon is in talks to stream live sports for Prime members, meaning the company could see a huge bump in subscription revenue.
Amazon has already held talks for live game rights with major sports leagues including the NFL, NBA, MLB, and MLS. In addition to the major league sports, Amazon is also exploring other athletics such as surfing, lacrosse, and even cricket. Amazon has even asked broadcasters such as Disney and Univision for rights to games they aren’t airing. This “give us whatever you aren’t using” approach could be incredibly lucrative to Amazon, bringing in fans of sports teams whose games are not aired on traditional TV as new Prime members. Amazon could even offer the sports package as a standalone skinny bundle, producing additional revenue off the same product. The only big hurdle seems to be premium rights. The NBA has a contract with both TNT and ESPN until 2025.
The NFL deals exclusively with CBS, ESPN, NBC, and Fox until nearly the same time. As a foothold, the company may start with less-often viewed sports such as gymnastics and lacrosse, eventually building a large audience similar to how the retailer started off as an online bookstore.
Here’s a 7 lesser know benefits of Amazon Prime from Tech Insider:
Providing live sports to fans who want the immediate gratification of watching their favorite athletes perform will absolutely bring in new Prime members, driving up revenue and profits to offset Amazon’s fixed and variable costs. Amazon is betting big on it, and investors agree as Amazon’s (AMZN) shares are up on the news. As usual, expect shares to continue up, and for Jeff Bezos to knock this deal out of the park.
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21 Stocks Everyone Should be Watching in 2020
Interested in what stocks to look out for this year? Then you’ll love this list of the best stocks in 2019.
These funds purchase multiple stocks and spread risk appropriately across the top companies. This is the advice of Warren Buffett, who once said,
“By periodically investing in an index fund, for example, the know-nothing investor can actually outperform most investment professionals.”
If you’re looking for a stock index fund, check out Vanguard’s 500 Index Fund.
With that aside, here are the most promising stocks in 2019:
1. Chipotle Mexican Grill
Chipotle is an international chain of restaurants specializing in tacos, burritos, and other Mexican style cuisines. They have establishments all over the world from the United States to Germany and France.
This beloved food joint performed very well in the first two quarters of 2019 and are expected to continue to grow.
P/E ratio as of August 2019: 87.81
2. Constellation Brands, Inc.
Constellation is an international beer and wine producer. They are the largest importer of beer in the United States and command 7.4% of the market share.
P/E ratio as of August 2019: 17.00
3. Lululemon Athletica
Lululemon Athletica creates athletic apparel such as performance shirts, shorts, and pants, as well as yoga accessories. They’ve built a brand over the years that millions recognize and love.
P/E ratio as of August 2019: 47.51
4. Coty Inc.
Coty Incorporated is a multinational company that specializes in beauty products and services such as cosmetics, fragrances, skincare, and nail care.
Coty owns over 70 brands, such as CoverGirl, Clairol, and Bourjois. In 2018, the company’s revenue was over $9.4 billion.
As of August 2019, Coty Inc. stock is valued at 10.42 USD. Their P/E ratio is not yet available.
5. Anadarko Petroleum Corporation
Anadarko is in the natural gas and petroleum industry. This entails everything from gathering resources to treating and transporting gas. The company is also in the hard mineral business.
In early 2019, Anadarko had an estimated 1.47 billion barrels of oil in reserve, making it one of the biggest players in the industry.
As of August 2019, Anadarko’s stock is valued at 73.48 USD. Their P/E ratio is not available yet.
6. Brookfield Infrastructure Partners L.P.
Brookfield Infrastructure Partners acquires and manages infrastructure assets all over the world. They specialize in utilities, energy, and transportation infrastructure.
The company invests in ports, toll roads, pipelines, and telecommunication lines. In other words, things that people will always need and use.
P/E ratio as of August 2019: 75.27
7. ONEOK Inc.
ONEOK (pronounced “one – oak”) Incorporated is in the natural gas industry and is a key leader in the gathering, storing, processing, and transporting natural gas in the United States.
P/E ratio as of August 2019: 22.62
TerraForm Power Inc.
TerraForm Power specializes in renewable energy, particularly solar and wind power. There is an ever-growing trend that demands less damage to the environment.
As the world values green innovations, companies like TerraForm are expected to be favored in the coming years.
P/E ratio as of August 2019: 227.44
Netflix is a service provider and production company with their main product being a subscription-based streaming service.
Streaming TV and movies have largely replaced traditional television. With no commercials and instant access to thousands of products, Netflix is suspected to continue to grow.
P/E ratio as of August 2019: 120.23
iRobot is an advanced technology company that specializes in military and domestic robots. They designed the Roomba, which is an autonomous vacuum cleaner.
The U.S. military has purchased and uses thousands of robots from iRobot and are contracted to make more.
P/E ratio as of August 2019: 22.24
Amazon is a multinational company that specializes in e-commerce and cloud computing. It’s considered one of the big four technology companies along with Apple, Google (Alphabet, Inc.), and Facebook.
Amazon is well known for distributing goods through technological innovation and on a massive scale. Some estimate that Amazon commands 50% of all goods sold online.
P/E ratio as of August 2019: 73.65
11. Apple Inc.
Apple is a multinational tech company that develops and sells computer software, electronics, and online services. They designed some of the world’s greatest tech products including the iPhone and Apple Watch.
Being a leader in tech devices, many analysts believe Apple is one of the most promising stocks to invest in.
P/E ratio as of August 2019: 16.61
12. Alphabet Inc.
Alphabet Inc. is a multinational conglomerate founded in 2015. It’s the parent company of Google, which is the dominating search engine on the internet.
Google performs 90% of all searches on the internet. Alphabet has additional subsidiaries such as Calico, Capital G, and Deep Mind.
These subsidiaries have their hands in industries such as autonomous cars, biotechnology, video game software, and internet tech.
P/E ratio as of August 2019: 23.87
13. Facebook Inc.
Facebook is the popular American social media site founded by Mark Zuckerberg. In 2018, Facebook had a net income of $22.11 billion and its total assets were $97.33 billion.
Facebook has subsidiaries such as Instagram and WhatsApp, which are also very popular social media outlets.
P/E ratio as of August 2019: 31.00
14. MarketAxess Holdings Inc.
MarketAxess is an international company that specializes in financial technology, also known as fintech.
They operate an electronic trading platform for various credit markets such as corporate bonds and income products.
P/E ratio as of August 2019: 70.82
15. AT&T Inc.
AT&T is a multinational conglomerate holding company and is the world’s largest company in telecommunications.
AT&T is the parent company of Warren Media, which makes it the largest entertainment company in the world in terms of revenue.
P/E ratio as of August 2019: 14.17
16. Verizon Communications Inc.
Verizon is a multinational telecommunications conglomerate. They are well known for their subsidiary Verizon Wireless, which is its mobile network.
Together with AT&T, these two companies dominate the mobile and landline market. Since our needs for communications will develop, these two stocks are poised to grow.
P/E ratio as of August 2019: 14.49
17. Axon Enterprise Inc.
Axon Enterprise Inc. is a U.S.-based company that develops weapon products and technology for civilians and law enforcement. This company developed the Taser, a line of electric shock weapons.
Since then, Axon developed other technologies including body cameras and a cloud-based management system that empowers police departments to manage and review evidence.
P/E ratio as of August 2019: 129.55
18. Intuitive Surgical Inc.
Intuitive Surgical Inc. develops and manufactures surgical equipment to make surgeries less invasive. As of 2017, they had 4,271 bases worldwide.
P/E ratio as of August 2019: 48.51
19. Ford Motor Company
Despite the localized recession in Detroit, the automotive giant is doing very well.
The market continues to demand their SUVs and commercial vehicles, not to mention their luxury vehicles, which are usually created under their Lincoln brand.
P/E ratio as of August 2019: 16.90
20. General Motors Company
General Motors is a multinational manufacturer of vehicles and own automotive brands like Buick, GMC, Cadillac, and Chevrolet. They have nearly 400 facilities on six different continents.
P/E ratio as of August 2019: 6.19
Let’s point out two trends from this list:
- Tech and software companies are dominating
- Utility-related companies are tried and true
About half of the world still doesn’t have internet access. And a large portion still doesn’t have access to common devices like cell phones and laptops. That means these industries are set up to grow significantly for years to come.
Of course, that doesn’t mean other industries will simply disappear. As you’ve seen in the list, there are still key industries that our society relies on, such as energy and infrastructure companies.
Some of the most promising stocks are in tech and software, such as Apple, Facebook, Google, and Amazon.
Nevertheless, the wisest investment is still a stock index fund, which bets on the collective market rather than individual companies.
5 Mistakes You Could Be Making In Your Small Business
Are business owners reluctant to say they have made mistakes in their small business? If you are making these 5 mistakes you can easily not be taking advantage to save time, money and also might be holding yourself back from serious improvement.
It’s one thing to be in the niche of technology with new headsets, and new software every time Apple or Google sneezes. But, what is really important? Productivity and giving employees the tools they need to be successful at their job. Also laying the groundwork for successful workplace, and keeping up with the times, with aspects, so you’re not a one-man show.
Today everything is so automated, from marketing automation, to CRM and Customer service automation. Right now the big trends are so popular. “The one size fits all,” when salesmen try and sell you new software, seems to lack the care, details, and differences, that small businesses face, and they seem like the most logical answer.
Small business is definitely a pre-structured environment, that owners have control of.
Here are 5 Practical Guidelines for Small Business Owners today.
4 Mistakes No CEO Should Ever Make
CEOs are busy and under a lot of pressure to perform well. If there’s anything wrong with the business, some of the blame will fall on the CEO.
With all that stress, it’s easy to make mistakes. This is a list of mistakes that a CEO can make.
1. Neglecting The Team
For a company to succeed, the members of that company need to be mentally and emotionally supported. In many ways, the CEO doesn’t run the company – the team does. And the CEO runs the team.
CEOs are busy and under a lot of stress, and sometimes they don’t provide the in-house care their company needs to succeed. One of the chief examples is not paying employees what they deserve.
If there’s a hard worker who isn’t getting paid well, that’s a recipe for bitterness and discouragement. That person is likely to quit, and may even go to a competitor.
Another key to taking care of employees is to consistently remove roadblocks to their work. If a CEO keeps making their workload easier, the team will grow to appreciate and trust their CEO.
2. Avoiding Feedback
This is a huge mistake CEOs fall into. Simply not asking for feedback on their performance or before making a decision.
There are a few reasons why a CEO might avoid feedback. They can neglect seeking feedback because they’re busy and just forget to do it. But if the CEO doesn’t see the importance of feedback or hates receiving it, they’re setting themselves up for failure.
Everyone, including CEOs, has blind spots and a need to learn and grow. They should routinely ask their boards for feedback and take advantage of counsel when it’s available. Good CEOs learn to ask professionals for advice, whether it’s from in-house or outsourced experts.
3. Bottlenecking Important Decisions
Bottlenecking important decisions is when a CEO insists that every important decision goes through them.
It’s understandable that a CEO wants to make all of the important decisions. There’s a lot of pressure on the CEO to keep mistakes to a minimum. Whether fair or not, a lot of fault falls onto the CEO if anything goes wrong.
It’s kind of like letting your teen drive your car for the first time.
However, there are two big reasons why this is a trap. One, this isn’t an efficient way to run a company. There are too many important decisions to make and if a CEO tries to make all of them, sooner or later they will experience mental overload.
The second reason is that CEOs are not always the best person qualified to make a decision. On many occasions, there is someone else in the organization who’s more qualified to make that decision.
For example, if the company is choosing a new country to build in, let someone who understands international law make that decision.
4. Picking A Favorite Coworker
You don’t have to be part of a company to know the damage this can cause. Ever see a parent favor a child over another? Or see a coach favor a particular player? It just demoralizes others.
Like all humans, CEOs want to connect with people and make friends. But they need to be careful they’re not playing favorites. If the CEO attends multiple conferences with the same person, the rest of the company may get the idea that they don’t matter as much.
Obviously, a CEO can’t be close friends with radically every single employee. But they should make an effort to maintain an equal relationship with the ones they’re close to.
Business Is About Adapting
CEOs will make mistakes, but the worst one is not learning from their errors. The chief lesson here is one we often come back to in the business world – keep adapting.
If a CEO is making one of the mistakes listed here, it’s time to change their ways. Like all workers, CEOs are growing, maturing, and evolving. Sometimes it takes time and sometimes it takes effort.
21 Stocks Everyone Should be Watching in 2020
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