In a memorable chapter of his excellent book That Will Never Work, Netflix co-founder Marc Randolph writes how in mid-1998 he and Reed Hastings flew to Seattle to meet Jeff Bezos. As he was about to start selling more than books, Amazon’s founder wanted to buy the fledgling Netflix, which at the time generated 90% of its revenue selling DVDs.
Read also: Alec Hogg: Washington’s attack on Big Tech may boost their share prices
Randolph and co-founder Reed Hastings declined the offer. But left with something more valuable, something that led to the creation of what is now a $240bn global business: they realised Netflix would never be able to compete with Amazon. The duo duly dropped the only profitable part of the enterprise and put all their eggs into DVD rentals.
___STEADY_PAYWALL___
Netflix was perhaps the first sizeable business to realise the futility of resisting Amazon’s bulldozer. But definitely not the last. So, Amazon’s move into luxury goods would have generated some trepidation among shareholders of Richemont, the JSE’s sixth most valuable listing. Especially as Bezos plays the long game – and in his new venture has has a base of 150 million paying Amazon Prime members to tap into.
Read also: Alec Hogg: Gradually then suddenly – it happens with criminals, too
Thus far, luxury’s biggest players – LVMH, Kering, Hermes and Richemont itself – have given Bezos the cold shoulder. Whatever the future holds one thing is clear: Richemont chair Johann Rupert’s prescience five years ago to bet big on online by creating the Yoox Net-A-Porter Group. Its digital arm, the sector’s marlket leader, gives Richemont the best chance of any luxury major to handle Amazon’s onslaught. Perhaps even profit from it.
For your attention today…
WEBINAR ALERT…
* As the graph above illustrates, Sanlam CEO Paul Hanratty, hasn’t been given the best of welcomes by investors. But he is sure of a warm reception in the Rational Radio virtual studio today where he is our CEO in focus. David Shapiro and Dr Adrian Saville will be helping you and I pose the questions. It’s for Premium members only. Join us at noon – register here: https://attendee.gotowebinar.com/register/6730147365502274830
* And tomorrow (Tuesday) at noon I host Martin Freeman and Justin Clarke from our business partners Orbvest, the $400m US medical property investment company that has captured many South African hearts. They’ll be taking the wraps off their latest investment building, their 29th and first in the “retirment state” of Arizona. Their minimum investment is $5 000 (R80 000). Register here to attend the webinar: https://attendee.gotowebinar.com/register/8416944439687108877
FOR DOWNLOADING…
* Chapter 10 of our audiobook on the Ramaphosa biography (read by yours truly) is now available for your listening. It’s a particulartly good one, as it focusing on how CR built the National Union of Mineworkers from a startup into a potent force for change. Here’s the link to the audio: https://iono.fm/e/937938
* I’m really proud of the just published BizNews Digest PDF which has clickable links to plenty of additional content that allow you to dive deeper into stories that interest you. Be sure to click-through at the bottom of Page One to an alert service where we’ll email you immediately after the PDF is published. Here’s the link to the latest edition: https://bit.ly/2GIjdoZ
* A vibrant edition of Jackie Cameron’s Finance Friday webinar last week where independent financial advisor Dawn Ridley (the female Magnus Heystek?) was joined by a couple of brainiacs from Ninety One – Albert Coetzee and Marc Linley. Here’s the link to the recording: https://www.youtube.com/watch?v=Nbw_7RPGLdc
DOWNLOAD THE FREE BIZNEWS.COM APP
Click on the links below to download your own BizNews.com App:
Apple: https://apps.apple.com/za/app/biznews-com/id1517392839
Android: https://play.google.com/store/apps/details?id=com.goodbarber.biznews&hl=en