Scott Galloway: Amazon Will Be Broken Up
Predictions made in 2017 for 2020: L2inc.com's Scott Galloway
predictions re:
AMAZON.com, Inc. $AMZN, catching up to
Netflix with original content, producing more innovative hardware than
Apple, and about to lead the biggest consumer sector in the world--
Amazon $AMZN: (1) this company will hit a $1 trillion market cap by 2020, and (2) thereafter broken up.
Sources:
(0:09) “Amazon to Acquire Whole Foods Market,” Amazon, June 2017.
http://bit.ly/2rynJxL
(0:39) “Amazon.com Market Cap,” Y Charts, July 2017.
http://bit.ly/2uWnj2y
(0:45) Yahoo! Finance, June 2016.
(0:56) “Supermarkets & Grocery Stores in the US: Market Research Report,” January 2017.
http://bit.ly/2tNg3r1
(0:56) SelectUSA, 2016.
(1:06) “Global E-Commerce Grocery Market Has Grown 15% To 48BN,” Kantar WorldPanel, September 2016.
http://bit.ly/2piz4jZ
(1:29) “7 Price Tags That Prove Whole Foods Has Gone Too Far,” Spoon University, June 2016.
http://bit.ly/2uefckp
(1:56) “Time Warner Boosting HBO Budget As Netflix, Amazon Keep Spending,” FierceCable, December 2016.
http://bit.ly/2o8CFkE
(1:56) “Amazon Is Spending An Insane Amount Of Money To Catch Up To Netflix,” Vanity Fair, April 2017.
http://bit.ly/2pjCxij
(2:09) “Exclusive - Amazon To Charge $2.8 Million For NFL Ad Packages,” Reuters, June 2017.
http://reut.rs/2t3rNGd
(2:45) Synergy Research Group.
Transcript via YouTube.com:
0:02 A
winner: Amazon and their acquisition of Whole Foods for $13.5 billion.
0:08 We don't like to gloat, but here are our predictions around the acquisition.
0:18 Okay, so we like to gloat a little.
0:20 This deal will be for Amazon what Instagram was for Facebook:
0:25 a genius acquisition that gives them an unbelievable growth vehicle.
0:28
Amazon in our view is going to be the first trillion-dollar market capitalization company.
0:34 The acquisition was essentially free as the marketplace said to Amazon hey it's yours
0:40 and bid up their stock more than the value of the acquisition price.
0:45 In addition, other retailers were told that they are going to pay for this acquisition
0:49 as their value was taken down the day that deal was announced.
0:53
Grocery is ripe for disruption. It's also the largest consumer sector
0:58
weighing in at $750 billion --
1:01 and Amazon is about to become the fastest-growing $1 billion-plus grocer.
1:06 The markets are going to love that.
1:08 Just one and a half percent of fast moving consumer goods sales in the US occur online.
1:13 Even in South Korea, that enjoys the greatest global penetration, at just 16%, shy of the 20% tipping point that really causes disruption in the sector.
1:23 Who's the big winner here besides Amazon?
1:25 Consumers.
1:26 Have you ever wanted to shop at Whole Foods but it was just too damn expensive?
1:29 Well, your prayers have been answered.
1:31 Amazon is going to lay their operational expertise across Whole Foods,
1:36 bring down prices and also put in place their hurdle rates for profitability i.e. zero.
1:42 As a result we're about to get a Mercedes for the price of Toyota.
1:46 Whole Foods is about to become in a word, awesome.
1:51 And who's the most dominant company on the second most important screen in the world, your television?
1:56 Netflix, but for how long?
1:57 They've increased their original content budget to $6 billion only because Amazon's feet they can hear behind them.
2:04
Amazon is about to become the fastest-growing media company in the world
2:09 and they're going to get sports, they're already streaming some NFL games.
2:12 Look for them to capture the Olympics, March Madness or the Super Bowl with their infinitely cheap capital
2:18 which will only expedite the incredible fall television is going to register
2:21 or broadcast TV is going to register when they no longer have sports as their firewall of viewership erosion.
2:28 And who's the most innovative hardware company in the world?
2:31 Yes it's still Apple, but for how long?
2:33
The most innovative hardware products of 2016 to 2017?
2:37 The Apple Watch? The AirPods?
2:39 No,
Amazon's Alexa.
2:41 Oh and who happens to be the most dominant company in the fastest-growing tech sector, the cloud?
2:47 Amazon.
By 2020 Amazon will be our first trillion-dollar market cap company.
2:53 But don't begin celebrating yet as soon after a district attorney will realize
2:57 that the fastest blue line path to the governor's mansion will be to go after Amazon and break them up
3:03 as we begin to connect the dots and realize this amazing company is destroying jobs faster than we can recreate them.
3:09 2020, a trillion dollars and the end of Amazon as we know it.
Video above originally published Jul 13, 2017 by L2inc.com.
