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The Food Network + Alexa (Future Ear Daily Update 9-30-19)

9-30-19 - Food Network + Alexa

One of the most exciting and interesting announcements from Amazon’s hardware event last week was around a new partnership between Amazon and The Food Network’s parent company, Discovery. As part of Food Network’s new subscription-based streaming service, called Food Network  Kitchen, subscribers will be able to view up to 25 live cooking classes a week, access to more than 800 on-demand cooking classes, and 3,000 step-by-step tutorial videos for $7 per month. Along with being accessible via iOS and Android devices, Discovery has entered into a three year agreement to integrate the service into Amazon’s smart displays, such as the Echo Show.

There’s a lot to unpack here. First of all, this is a huge boon for Amazon’s smart displays as it represents a potentially killer application that takes advantage of everything that makes the smart display unique. At last year’s Amazon hardware event, the company revealed the second generation Echo Show and positioned it as a”kitchen TV replacement.” Amazon knows that the sweet spot for its smart displays is in the kitchen and has effectively doubled down on this insight with the Food Network Kitchen integration. “Alexa, play Bobby Flay’s newest video from Food Network Kitchen.”

Second, this starts to connect Amazon’s Whole Foods acquisition to Alexa in-the-home, in a more meaningful way. Food Network Kitchen subscribers will be able to quickly and easily order any or all of the items that are included in the videos that they’re streaming. Viewers will have the option to have those groceries fulfilled by Peapod, Instacart and Whole Foods, and the former two options will likely apply more-so to iOS and Android subscribers, as Whole Foods will likely make more sense for subscribers tied to the Echo Show. “Alexa, order me all the ingredients for this dish.”

Third, this represents an entirely new business model specific to Alexa. To date, we’ve only seen a few ways that Amazon is monetizing off of Alexa. In a fascinating revelation from Bret Kinsella’s Voice Insider (you should subscribe), Amazon SVP Dave Limp mentioned that the goal for the Alexa hardware is to just break even. This has been a hunch from folks like Bret who are deeply knowledgeable about this space, but to hear it come straight from the powers-that-be, confirms it. Alexa has never been about hardware sales; It has always been about Alexa proliferation, and we’re starting to see why.

In a year or two from now, we very well may see Alexa playing host to a full-range of on-demand subscriptions from a variety of different verticals, and Amazon taking a cut of each subscription. Like Amazon so often tends to do, the company once again is in position to play the role of the, “Tax Man.” (If you’ve never read Ben Thompson’s “The Amazon Tax” piece, it’s one of the best analysis of Amazon I have ever read. It applies to everything Amazon does. Fundamental reading.)  “Alexa, launch Bamboo Learning’s tutor service.”

Fourth, in addition to bringing the Whole Foods acquisition closer to the Alexa-ecosystem, Amazon laid the foundation at this event to tie more of its pieces together. Included at the event was a smart oven, which can be paired to an Echo Show smart display and revealed “scan-to-cook.” Owners of this smart oven, will be able to scan the packaging label on “hundreds of Whole Foods’ items” to program the oven properly (time and temperature.” It’s not far-fetched at all to think that Amazon will build on this, eventually tying it to services like Food Network Kitchen, so that users can just say, “set my oven to the settings here,” while they watch a video. Everything is trending toward a merger with Alexa sitting squarely in the intersection.

In essence, this was an absolutely brilliant move by Discovery and Amazon. Discovery could ultimately end up with something like a Peloton-type subscription with Food Network Kitchen. Meanwhile, Amazon might have just landed a truly killer app for its smart displays, helping to further proliferate Alexa into the kitchen, while simultaneously bringing multiple of its pieces closer together in the Alexa-ecosystem that it’s building out.

-Thanks for Reading-


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