Amazon’s current market cap – its value based on its share price – is $1.32 trillion. But how much are its music and media businesses worth?
Needham analyst Laura Martin has been calculating the combined value of Amazon’s music and video services, as well as Twitch (which it acquired for $970m in 2014) and on-platform advertising and has come back with a figure: $500bn. This is based not just on the potential standalone value of these services, though: it’s also about the value they provide for the rest of Amazon’s business, for example Prime memberships.
“AMZN’s media strategy supports our view that the company employs a ‘land and expand’ strategy by entering consumers’ homes through its e-commerce business and subsequently adding services to its consumer-facing bundle that increase [value],” wrote Martin. “Media assets also improve AMZN’s data flywheel because they improve AMZN’s consumer data across more demos inside the home, which improves its next add-on product.”
Look away now, anyone feeling defensive about the music industry’s value in comparison to other sectors: Martin estimated that Twitch is worth $15bn; advertising is worth $127bn; and the media impact on Prime subscriptions is worth $187bn – but that Amazon’s music business is worth… $3.8bn.
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