The Canadian wildfires that are causing enormous and unhealthy haze and smoke in much of the US are a reminder of how connected things are, like it or not, and how people and governments and companies often respond in the worst of moments.
So, I got an email yesterday pointing out that a One Medical office will be opening shortly in my town. It linked to a 511-word press release that said:
"One Medical, the modern hybrid virtual and in-office primary care organization, today announced it will bring its high-quality health care to Connecticut with the opening of a Darien Commons office. Offering same and next-day in-office visits, paired with 24/7 seamless virtual care via its mobile and web app, One Medical will open another location at New Canaan later this summer. One Medical will collaborate with Hartford HealthCare in the Connecticut area to offer seamless access and coordination across primary and specialty care services."
The release also said:
"The new office offers preventative and everyday health visits, full lab services, chronic illness management and mental health support. Appointments start on time and provide uninterrupted, dedicated time between patients and their primary care providers.
"Consumer memberships are $199 per year, but One Medical works with employers across all sizes and industries throughout the U.S. who cover the membership fees as a benefit for their workforce. The membership includes 24/7/365 virtual care services through the One Medical mobile app, featuring on-demand video visits, secure provider messaging, 'Treat Me Now' digital assessments for common health concerns, easy vaccine and medical record access, prescription renewals and proactive reminders for follow-up care and referral needs."
And, it concluded, "One Medical currently operates over 200 locations across more than 20 U.S. markets."
All well and good.
But in the 511 words used to describe this opening, there was one word that never was mentioned. Not once.
Amazon.
Which is interesting, since Amazon acquired One Medical for $3.9 billion earlier this year. That's Amazon's third-largest acquisition ever, behind only Whole Foods in 2017 for $13.7 billion, and MGM in 2021 for $8.5 billion.
And yet, at no point did the announcement identify One Medical as "an Amazon company."
And so I find myself wondering - have we reached the Eye-Opening point where being identified as "an Amazon company" may not be seen as an asset?
The Wall Street Journal reports that Amazon "is planning to launch an advertising-supported tier of its Prime Video streaming service as it looks to further build its ad business and generate more revenue from entertainment."
The discussions of such an offering, the Journal writes, "come in the wake of cost-cutting reviews across the company’s businesses, resulting in tens of thousands of layoffs.
"Advertising has been an area of continued growth for Amazon despite macroeconomic challenges. The company’s ad revenue was $9.5 billion in the first quarter, up 21% year over year. The company is the third-biggest player in terms of digital ad revenue in the U.S. after Google and Meta, according to Insider Intelligence.
"Advertisers say they are eager to have Amazon offer an ad tier for Prime Video service, which would follow similar moves by other streaming platforms including Netflix and Disney. Specifically, ad buyers say they want more access to premium movies and programs that have remained largely ad free, content that often garners more buzz."
Amazon also is said to be "having discussions with Warner Bros. Discovery and Paramount Global about adding the ad-based tiers of their streaming services through Prime Video Channels, according to people familiar with the situation. Through Prime Video Channels, users can sign up for streaming services - including the ad-free versions of Max and Paramount+ - and view through the app."
One other possibility, the story says, is that in addition to offering a ad-supported tier, Amazon could raise the price for the ad-free version.
The Journal notes that Amazon CEO Andy Jassy, who has not been shy about eliminating businesses that were conceived and/or nurtured by his predecessor, company founder Jeff Bezos, "has told people internally that he sees the value of entertainment and particularly live sports … but also has been spending a lot of time reviewing the company’s unprofitable divisions.
"Meanwhile, Amazon is discussing bidding for the rights to stream National Basketball Association games, whose rights come up for renewal in 2025, the people said, adding that launching a Prime Video ad-supported tier could help pay for those rights."
KC's View:
My first reaction is that Jassy sometimes seems to be checking in between the cushions to see if there's any spare change. But maybe that's not entirely fair.
I think that Amazon has to be careful here. It may feel that it can squeeze a little more money out of ad-free subscribers, and squeeze some money out of people who want to pay a little less for an ad-supported video platform. But in some ways, this all seems like small ball, and at odds with what always was positioned as Amazon's strategy in such things - build so much value in Prime memberships that a) people would be irresponsible not being members, and b) sales would go up because Prime members spend more overall. Maybe this isn't the case at the moment, but is it smart to abandon the long-term strategy for a short-term cash fix?
Things are a little complicated at Amazon right now. The Information has a story about how Amazon apparently overestimated both the audience appeal of NFL games streamed on Prime Video and advertisers willingness to pony up for the right to be associated with the games, resulting in both a major financial loss and, to be fair, an educational experience.
According to the story, "Amazon ended up losing hundreds of millions of dollars during its first year of streaming Thursday Night Football, estimate TV, sports and ad industry insiders, given both the $1 billion-dollar a year rights fees and production costs. An Amazon spokesperson said that its investment in NFL 'fuels many business initiatives across Amazon,' although he acknowledged that there are 'upfront costs that affect the initial period.'
"Hans Schroeder, executive vice president of media distribution for the NFL, said the league was 'thrilled' with the first season of Thursday Night Football on Amazon Prime, noting 'we have been focused on increasing the digital distribution of NFL games.'
"Amazon’s experience could have enormous implications for the future of live sports on television. If Amazon can’t make money on the NFL, it’s unlikely to want to keep bidding on more expensive live sports rights."
The problem was that Amazon asked potential advertisers to spend roughly twice the amount they money that they planned to spent on full-season sponsorships. In many cases, they balked: "Amazon’s efforts to build a video-advertising business - by selling commercial time on NFL games, its free streaming service, Freevee, and its live-video platform, Twitch - have not easily won over advertisers, according to ad executives.
"An Amazon spokesperson said last season’s Thursday Night Football on Amazon Prime had brought 'more than 11 million viewers to Prime Video each week, including audiences that were 'significantly younger, watched longer and commanded higher household incomes than NFL viewers on broadcast and cable networks'."
in the coming season, Amazon hopes things will break differently. For one thing, it has a better slate of games and matchups to cover. (At least it hopes so. One never knows until the games are played.). It is being more flexible about the terms it is offering advertisers, and is reducing by as much as 20 percent its audience guarantees. The Information writes that "last year, there was no precedent in terms of a tech company live streaming NFL games exclusively for a full season, said an Amazon spokesperson. This year, the company has actual data that is helping inform its negotiations with advertisers."
But there is the perception in some quarters that there are larger issues in play here.
CNBC has a story about how Bernstein analysts are arguing, via an open letter to Jassy, that "Amazon has become too unfocused and is missing out on opportunities in its core businesses."
"We fully support Amazon’s efforts to uncover and capture the next AWS-sized opportunity,” wrote Bernstein’s Mark Shmulik. "But what we’ve seen recently is a company simply pursuing too many ideas, with weaker ideas taking away the oxygen, capital, and most importantly focus from the truly disruptive initiatives that ‘only Amazon can do."
Scott Galloway, on the "Pivot" podcast he does with tech journalist Kara Swisher, said this week that he believes that Amazon has to return to what it does best - finding big opportunities for disruption and following the Jeff Bezos mantra that "your margin is my opportunity."
In other words, stop looking for spare change in the couch cushions, and get back to being Amazon.
Bloomberg has a story about how "a slew of retailers are beefing up their grocery investments to lure in consumers cutting back on non-essentials like clothing and electronics. But as they lay out plans to improve their food offerings and supply chains, the big question is how does one compete with the mighty Walmart Inc. on its home turf.
"Mass merchant Target Corp. may have an answer — don’t compete with Walmart at all.
"While Target is often compared with Walmart as a budding grocer, its shoppers look a lot more like the overeducated and underpaid demographic Trader Joe’s founder Joe Coulombe identified as his core audience. It’s in this space, which includes Amazon.com Inc.’s Whole Foods and Sprouts Farmers Market Inc., where a new wave of competition is playing out."
Bloomberg describes this as "a sensible bet for Target," which "already commands an enviable level of loyalty among its customers … It has a reputation for offering quality private labels such as kids clothing line Cat & Jack and personal care brand Up & Up, both of which are now worth more than $1 billion. Chief Executive Officer Brian Cornell also has a track record of building on the company’s strengths to respond to new trends, as he did with the 'stores as hubs' strategy that used Target’s store fleet as fulfillment centers for online orders."
The argument goes like this: Trader Joe's and Sprouts may be aiming to attract the same customers as Target, but together they have only 900 stores, compared to Target's 1,900. While not all Target stores have food, changing that is the company's long-term plan.
At the same time, "Amazon has done little to leverage the full potential of Whole Foods. When the e-commerce behemoth acquired the high-end grocer in 2017, supermarket stocks fell as industry watchers warned of the coming disruption." But that hasn't happened, and Bloomberg writes that there may be "an opportunity for Target to capture disillusioned shoppers who like the experience of shopping at Whole Foods but not the price."
KC's View:
Maybe I'm wrong. Maybe I've not been to the right Target stores. But when I've been in Target stores with groceries, I don't see that there is a huge separation between it and Walmart. Maybe a bit, but not enough to compare it to Trader Joe's, Sprouts, or Whole Foods.
Newsweek reports that "Aldi has been named in a class action lawsuit in California that alleges it misrepresented its fruit and grain bars to consumers by claiming they only contain natural products.
"In a filing with the U.S. District Court for central California on May 30, a lawyer for plaintiff Deana Lozano, a health care administrator and amateur athlete, argued that despite the product's packaging claims that the bars have 'no artificial flavors' and were 'naturally flavored,' laboratory testing had found they contained DL malic acid, a synthetic flavoring.
"The lawsuit is demanding $9,999,000 in damages for customers who bought the product in the past four years and alleges Aldi's packaging violates several California codes and had precipitated the 'unjust enrichment' of the company."
Newsweek writes that "the lawsuit noted that synthetic malic acid 'is manufactured in petrochemical plants from benzene or butane - components of gasoline and lighter fluid, respectively.' According to the National Library of Medicine, it is produced by 'catalytic oxidation of benzene' and is deemed to be of 'low concern' by the Environmental Protection Agency."
KC's View:
The bet here is that this suit goes nowhere, largely because it always seems like when rulings come down in such cases, judges conclude that phrases like "no artificial flavors" actually mean "almost no artificial flavors," or "no artificial flavors that you need to worry about."
The New York Times reports that Senators Richard Blumenthal (D-Connecticut) and Marsha Blackburn (R-Tennessee) have sent a letter to TikTok CEO Shou Chew "accusing the company of making misleading claims to Congress around how it stores and handles American user data, and demanding answers to more than a dozen questions by the end of next week." The letter, the Times writes, "focused on how sensitive data about American users may be stored in China and how employees there may have access to it."
The story notes that "Forbes reported last month that TikTok has stored the sensitive financial information of creators, including Social Security numbers and tax IDs, on servers in China, where employees there can have access to them … The Times reported earlier in the month that American user data, including driver’s licenses and potentially illegal content such as child sexual abuse materials, was shared at TikTok and ByteDance through an internal messaging and collaboration tool called Lark."
Blackburn and Blumenthal wrote, "We are deeply troubled by TikTok’s recurring pattern of providing misleading, inaccurate or false information to Congress and its users in the United States, including in response to us during oversight hearings and letters."
TikTok has consistently maintained that "it can separate its U.S. operations and wall off American user data amid concerns that the company could provide that information to the Chinese authorities," the Times writes.
KC's View:
This could be a big deal for businesses that have been growing their TikTok marketing footprints, if feds decide that its existing structure is a national security threat.
• Amazon said yesterday that US retailers using its Amazon Pay system - which allows customers to make purchases using information already stored on Amazon.comm - now will also be able to "add Affirm’s Adaptive Checkout as a payment option at checkout. This brings Affirm’s pay-over-time technology, used by millions of customers on Amazon.com and the Amazon mobile app, to Amazon Pay’s simple and secure payment solution."
According to the announcement, "Amazon Pay merchants, including Casper, USA Berkey Filters, and UltraSabers have already integrated Affirm’s Adaptive Checkout within Amazon Pay, and they anticipate increases in overall sales and conversion while reaching new customers. Offering Affirm at checkout can drive overall sales — merchants using Affirm have reported 60% higher average order values when compared to other payment methods. It can also increase customer loyalty, as approximately 88% of Affirm purchases are from repeat Affirm users."
From the TechCrunch analysis:
"Affirm first announced an initial partnership with Amazon in August of 2021, which was exclusive through January of 2023. It started by rolling out in the U.S., before launching on Amazon.ca and the Amazon mobile app in Canada last September.
"Now, through what Affirm describes as its Adaptive Checkout technology, the company says it gives consumers customized payments options, such as bi-weekly and monthly, for purchases over $50 starting at 0% APR. Amazon Pay customers who select Affirm as a payment option do have to be approved first in a process that Affirm says will not impact their credit score.
"The fintech company has always touted that consumers using its technology 'will never pay more than they agree to' as 'there are no late or hidden fees with Affirm'."
• The National Grocers Association (NGA) announced that RF Buche, a fourth-generation grocer and president of South Dakota-based GF Buche Co., has been presented with its Spirit of America Award, recognizing his commitment "to the independent grocery industry and his work in his community."
Buche received the award during NGA’s Fly-In for Fair Competition in Washington, D.C.
• FMI-The Food Industry Association yesterday what it called a "strong endorsement of the bipartisan Credit Card Competition Act, which was reintroduced in Congress by Sens. Dick Durbin (D-IL), Roger Marshall (R-KS), Peter Welch (D-VT) and J.D. Vance (R-OH) and Reps. Lance Gooden (R-TX), Zoe Lofgren (D-CA), Jeff Van Drew (R-NJ) and Tom Tiffany (R-WI). This legislation would require more than one network to be enabled on credit cards, giving food retailers choice in payment routing and fostering competitive innovations in services like fraud protection for merchants and consumers alike."
