Amazon (AMZN) – Affordable Grocery Subscription & Sports – April 27, 2024
Amazon debuted a $9.99 per month grocery delivery subscription. It allows Prime Members to order from Amazon Fresh, Whole Foods and some local partners for unlimited monthly delivery. While Amazon can’t tie this into ride sharing like Uber can, this will still be an increasingly meaningful competitor to focus on here. And candidly, this is an even bigger threat for mono-line businesses like Lyft and Doordash, which can’t bundle products for unique value as powerfully as Uber does.
In other news, Amazon Prime Video will stream NHL games in Canada next year and is negotiating with the NBA on expanded content rights. Amazon has the ability to use live sports as a loss leader. It can easily cross-sell margin accretive products and bundles to subscribers to make this loss leader a rational maneuver. With live sports commanding as much passion and attention as they do, Amazon is poised to use its fortress balance sheet to take more and more of these watch hours. As an aside, this is exactly why I think Disney’s ESPN still must partner with a mega-cap tech player (as well as the rumored NFL deal).
