With drone deliveries, its own line of consumer products, robots scurrying around its warehouse and an AI-powered home speaker system, it sounds weird to say that the next driver for Amazon (AMZN) stock could be … infomercials?
Weird or not, channels like HSN (HSNI) and Liberty Interactive‘s (QVCA) QVC have proven the concept far beyond a reasonable doubt: Consumers will watch people on TV talking about their newest products, and they will buy those products. A lot of them.
Never afraid of a challenge, it looks like the king of e-commerce, Amazon, is mulling a move into infomercials as well — online infomercials. And don’t get it twisted: this could be huge for the AMZN stock price.
Some Telling AMZN Job Postings
Last week, on its own website and on LinkedIn (LNKD), Amazon listed a job posting seeking a live video show producer, according to USA Today. But the AMZN job description didn’t seem to imply a typical TV show was in the works; according to the report, the show would instead be product-oriented:
“Amazon is forming a new business initiative to leverage video as a medium to drive product sales on Amazon,” read the listing. “We are looking for a seasoned television producer to help us produce and run a daily live show.”
In particular, the show would be focused on fashion, and cater to millennials. It’s sort of a brilliant idea. Here’s why.
Major Opportunity for AMZN
While infomercials are nothing new, they typically cater to an older crowd. It makes sense: Retirees, for example, typically have more time and more money than 20-somethings. But 20-somethings are tech-savvy and spend a lot of time online. With more and more people opting to cut the cord on cable and simply watch TV on the internet, AMZN sees a first-mover opportunity.
Unsurprisingly, it’s acting on that opportunity immediately. And infomercials are a LARGE opportunity, even for Amazon.
Last year, combined revenues at HSN and the QVC Group segment of Liberty Interactive totaled $13.6 billion, or 15% of total AMZN revenues last year.
While the addressable market in Amazon’s case probably won’t be that large at the offset, if it takes off, there’s nothing to stop Amazon from making a concerted push to target older, deeper-pocketed viewers — the ones who currently frequent HSN and QVC.
Video demonstrations are particularly effective at driving product sales, so an online infomercial-like program should be a net positive for Amazon — and AMZN stock — no matter which way you look at it. And don’t be surprised if, when the service is launched, it requires a $99 annual subscription to Amazon Prime.
As of this writing, John Divine did not hold a position in any of the aforementioned securities. You can follow him on Twitter at @divinebizkid or email him at firstname.lastname@example.org.