By Ingrid Lunden
As Amazon (NASDAQ:AMZN) gears up for its quarterly earnings later this week, the company announced Monday an expansion that points to its big ambitions in digital media, and an increasing focus on how that growth will come from outside the U.S.. Amazon is opening a new R&D hub in London focused on developing services and APIs for TVs, games consoles, smartphones and PCs, with the aim to roll those out across the company's global footprint. That is a major development for a company that has been somewhat slow to roll out its newest services beyond its U.S.-homebase.
Amazon says that the eight-floor, 47,000-square-feet space in Glasshouse Yard - not far from London's "Silicon Roundabout" tech hub - will house software engineers, user-interface experts and graphic designers. The company owns UK streaming service and Netflix (NASDAQ:NFLX) competitor LOVEFiLM as well as UK-based TV app company Pushbutton, which will both be relocated to the new center. Paula Byrne, the MD of Pushbutton, will become the MD of the new R&D operation.
Although the center will be built out of Amazon's UK holdings, what's clear in Monday's announcement is that Amazon is thinking beyond just the UK. The work, it says, will be focused on "new digital media projects that will benefit Amazon customers all over the world."
That's a sign that the company may be looking to accelerate the pace at which it rolls out products. To date, Amazon has been (some would say frustratingly) slow in how it takes products internationally. The Kindle existed in the U.S. for nearly two years before it first hit international waters. The Kindle Fire has yet to go beyond the U.S. in its distribution. The Appstore is still U.S.-only, too. The company has been making more efforts to open this up, however. In June it finally unveiled an international Appstore portal for developers, the first step in getting that store outside the U.S.
But apart from that, it's also potentially thinking beyond what we already know as Amazon's own services: the company makes specific mention in its announcement of the development of APIs - an indication that it is looking to further the concept of an Amazon-centric ecosystem as much as something that Amazon might develop itself.
Amazon, which first came to the UK in 1998, already has an extensive world-wide digital media operation that includes video streaming services (including LOVEFiLM and Amazon Prime in the U.S.), digital music services (downloads and streaming), an app storefront for Android devices, and games.
That's on the retail side; on the wholesale side, its cloud infrastructure plays host to some of the most popular services around - with the recent, storm-related outage of a major data center, taking down sites like Instagram with it, a testament to what a big deal Amazon is on that side of the story.
Amazon's no slouch in hardware, either. If you believe the many reports that have come out, it will soon be adding a smartphone to a device portfolio that includes the Kindle e-readers and the Kindle Fire tablet. That tablet, incidentally, will soon be making its way to the UK by way of a surprise partnership with UK bookseller Waterstones.
Those devices, combined with Amazon's cloud-based media operations, are key focuses for the company as it further diversifies beyond its bread-and-butter online marketplace for books and more, and so it makes sense to put more investment into services that will help both of these keep growing in users - and revenues.
The idea of the London center will be to bring some of this together, leveraging R&D talent in London and from around neighboring countries in Europe to build it.
"London is a hotbed of tech talent and testament to that fact is Amazon choosing the capital as the location for the new global Digital Media Development Centre," said Byrne in a statement. "Innovation is part of the Amazon DNA and we are creating a British centre of excellence to design and develop the next generation of TV and film services for a wide range of digital devices." One product in this vein, Amazon notes, is LOVEFiLM Instant, an unlimited, flat £4.99/month streaming service that works on 280 Internet-enabled devices from PCs to the Sony PlayStation 3, the iPad, Xbox 360, and connected TVs.
There is one other thing to keep in mind here, from out of left field: at the time of the gTLD domain name news, Amazon emerged as a key player, applying for dozens of new domain names. It will be interesting to see whether that strategy - which saw Amazon applying for new domains like tunes, mobile, game and movie - meets up with whatever gets created at this new center.