Amazon Prime AirPublished by Kirk on .
On the evening of December 1, Amazon’s CEO Jeff Bezos unveiled a new program, Amazon Prime Air. The service promises octocopter drone delivery within 30 minutes for eligible products (with a five-pound weight limit). It’s an audacious plan, but one which he concedes won’t launch until 2015 at the absolute earliest, and possibly years later. So why announce it now?
The Short Term
The reason for the precise timing of that particular Sunday evening is easy: the next day was Cyber Monday. The unfortunate term “Cyber Monday” was coined by a retail marketing group in 2005, years after the word “cyber” stopped being cool. Nevertheless, it’s a big shopping day in its own right and, perhaps even more importantly, is an easy concept for lazy reporters to latch onto for annual stories that practically write themselves. Anything that can get you in the news for Cyber Monday also helps displace anybody else who might otherwise end up in the news. With one well-timed announcement, Amazon was able to ensure that every news outlet would be talking about them as the holiday shopping season picked up. That explains the exact date, but it still doesn’t explain the broader timing, when the rollout is still years away.
The Long Term
Opinions take a long time to change. Years of drone strikes in the Middle East have associated unmanned flying machines with death and destruction. At best, they kill terrorists in a war that seems unlikely to ever end; at worse they miss their intended targets and kill children. The privacy implications of small machines flying through neighborhoods with cameras would, understandably, have always been a challenge for any company to overcome, but the sudden awareness of the NSA’s extensive surveillance activities has brought with it heightened public scrutiny. Quite simply, by announcing early, it gives people time to get used to the idea. They can consider their own privacy concerns, but now they can also think of the potential direct benefits to themselves. It takes the concept of “drones” out of the realm of soldiers and spies and makes it about getting that extra game controller here now, in time for this evening’s party, or that replacement thermometer to take the temperature of a sick child. As time goes on, people will find themselves in situations where they could appreciate the advantages of Prime Air and wish they had it.
Over the next few years, legislators and administration officials will begin to develop the laws and regulations to govern drone use in America. By announcing their plans before these rules are made, Amazon ensures itself a seat at the table. Instead of lawmakers asking themselves “What kind of things should we allow?” the question becomes “How do we enable Prime Air (while still taking consideration of the other concerns)?” With one demonstration video, Amazon established a clear, practical goal for the regulators to help make happen. Moreover, they’ve given the public at large time to appreciate and support the plan.
The early announcement provides other benefits as well. It’s just good overall branding; it helps establish Amazon as a leader and innovator. Following Amazon’s announcement, UPS revealed to The Verge that they have been researching drones as well. They were considering such ideas for some time, but Amazon beat them to announcing it, and with a slick video that can’t be matched by a couple of vague statements. This puts the nation’s largest parcel delivery company in the position of playing me-too in the field of … deliveries. The announcement may also help Amazon on Wall Street. The company famously manages its profit margin to as close to zero as possible. While certain business segments undoubtedly make money, all profits are fully reinvested into the company, which has resulted in an astronomical price-to-earnings ratio. This plan has been well-articulated, repeatedly, and so far the stock market has been willing to go along with Amazon’s profitless growth, but they can’t be expected to wait forever. A plan as ambitious and high-profile as Prime Air helps investors feel confident that Amazon is still a worthy long-term investment—that it’s a company with visionary leadership and a bright future ahead of it. A placated investment community is one less distraction for Bezos to have to deal with.