The spending is part of a wider plan to take on Netflix, Inc. (NASDAQ:NFLX) and other online digital media services, but has led to criticism from investors due to the fact that the company remains in the red.
Audible, the audiobooks service that Amazon.com, Inc. (NASDAQ:AMZN) bought for $300 million in 2008, will pick up Rooftop Media for an undisclosed sum. Donald Katz, Audible founder and chief executive, said that the company was attracted by Rooftop’s strong content and varied pool of talent.
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Abacab Asset Management's flagship investment fund, the Abacab Fund, had a "very strong" 2020, returning 25.9% net, that's according to a copy of the firm's year-end letter to investors, which ValueWalk has been able to review. Commenting on the investment environment last year, the fund manager noted that, due to the accelerated adoption of many Read More
What is Rooftop?
Rooftop makes recordings of comedy shows across the country and then licenses the digital rights to thousands of hours of content, which is either broadcast live or later on demand. Up to now its media partners have included Apple Inc. (NASDAQ:AAPL) and Yahoo! Inc. (NASDAQ:YHOO), as well as streaming services like Sirius XM Holdings Inc. (NASDAQ:SIRI), Spotify and Pandora Media Inc (NYSE:P).
As a consequence of this latest deal its content will be included on Audible, which Rooftop Chief Executive Officer Will Rogers claims will vastly expand his company’s audience.
Analysts expect Amazon to continue its strategy of acquiring digital content. In an attempt to branch out from its online retail roots, the company has invested in content production as well as a line of tablets, smartphones and set-top-boxes.
For years investors have forgiven the company’s lack of profits because of its huge growth in revenue. However this growth has recently stalled, with the company missing revenue and income expectations last week. It also projected a 7-18% rise in holiday-quarter sales, which left investors disappointed.
CEO Jeff Bezos has designs on becoming a media and technology behemoth, but this vision has put him at loggerheads with investors concerned by the state of company accounts.
Despite share prices being up 0.6% on Monday, it remains down around a third from the beginning of the year. It remains to be seen whether investors will give Bezos enough time to see if his strategy bears fruit.