Amazon buys mobile video services firm Elemental Technologies for a reported $500M
Amazon on Thursday announced the acquisition of Elemental Technologies, a firm that provides video processing services for encoding and transcoding traditional media content for consumption smartphones, tablets and PCs.
A source familiar with the matter told The Information that Amazon's Elemental deal, being handled by Amazon Web Services, is worth some $500 million. Amazon later confirmed the purchase, but offered no comment on sale terms, in a press release.
Using Elemental technology, AWS can offer media companies an integrated video processing solution that enables multiscreen content delivery through the cloud. Potential clients include television broadcasters, entertainment companies, pay TV operators and any other media entity looking to convert traditional content into Web-friendly assets to be viewed on a wide variety of mobile device platforms.
Elemental already has more than 700 media franchise customers including ABC, BBC, Comcast, HBO and ESPN, among others. The firm's software powers a number of popular over-the-top streaming apps like the BBC's iPlayer, CNNGo, ESPN ScoreCenter, HBO GO, Sky Go and Sky Now.
Elemental's purchase bolsters Amazon's already significant presence in the cloud-based video streaming services industry. AWS currently provides video hosting and streaming for Netflix, for example.
Amazon says the deal is expected to close in the fourth quarter of 2015.
Apple is thought to be entering the OTT market with an as yet unannounced Apple TV service, though negotiations with content owners are reportedly in flux. Beyond licensing talks, there is also the issue of preparing, hosting and streaming content to paying customers.
A source familiar with the matter told The Information that Amazon's Elemental deal, being handled by Amazon Web Services, is worth some $500 million. Amazon later confirmed the purchase, but offered no comment on sale terms, in a press release.
Using Elemental technology, AWS can offer media companies an integrated video processing solution that enables multiscreen content delivery through the cloud. Potential clients include television broadcasters, entertainment companies, pay TV operators and any other media entity looking to convert traditional content into Web-friendly assets to be viewed on a wide variety of mobile device platforms.
Elemental already has more than 700 media franchise customers including ABC, BBC, Comcast, HBO and ESPN, among others. The firm's software powers a number of popular over-the-top streaming apps like the BBC's iPlayer, CNNGo, ESPN ScoreCenter, HBO GO, Sky Go and Sky Now.
Elemental's purchase bolsters Amazon's already significant presence in the cloud-based video streaming services industry. AWS currently provides video hosting and streaming for Netflix, for example.
Amazon says the deal is expected to close in the fourth quarter of 2015.
Apple is thought to be entering the OTT market with an as yet unannounced Apple TV service, though negotiations with content owners are reportedly in flux. Beyond licensing talks, there is also the issue of preparing, hosting and streaming content to paying customers.
Comments
Umm... Amazon has money to spend??? I thought they lost money every quarter?
EPS is -$00.42 with (obviously) a non-existent P/E. Analyst ratings show 39 buys, 8 neutrals and 1 sell with an average target of $584.47. The high target, established by Morgan Stanley, is pegged at $740!!!!!!
So AMZN gets rewarded for negative profit with a 50% upside (high) target price, or ~15% average target price, and AAPL is hammered 30% for China growing slower than expected.
I should've gone to Wharton School of Finance instead of skipping college……..so I'd be better at understanding this.
Is AWS a company separate from Amazon with their own P/L, or are those alleged profits just buried under the weight of ongoing Amazon losses?
UPDATE: This is a good article that lays out the nuts and bolts of Amazon's business model. They are all about cash flow: http://a16z.com/2014/09/05/why-amazon-has-no-profits-and-why-it-works/
Is AWS a company separate from Amazon with their own P/L, or are those alleged profits just buried under the weight of ongoing Amazon losses?
UPDATE: This is a good article that lays out the nuts and bolts of Amazon's business model. They are all about cash flow: http://a16z.com/2014/09/05/why-amazon-has-no-profits-and-why-it-works/
Now that is interesting.
So the reason they don't make a profit is because they plough all the revenues back into the business. I imagine that's a very good business model and saves them a heap in taxes too.
https://awsinsider.net/articles/2015/07/23/amazon-q2-fy15.aspx
If Bezos gave up on all of their shipping and fulfillment services they'd actually be highly profitable with their web and digital services.
I know this company and they are not worth $500M, most all their customers today are cable video providers. They make a transcoding compression system. I wonder how Amazon is going to deal with all the licensing deals Elemental has with these cable operators. It one thing to buy a company to add to your portfolio, but it is another to buy them to use their technology internally and also have to support current customer who have long term licensing and SLA contracts.
I suspect that Elemental customers make have something to say about Amazon owning supplier to the video distribution industy.