Amazon's next move

TEXT OF STORY

SCOTT JAGOW: Last month, Amazon started selling groceries. Then, it was rumored the company might offer music downloads. Now, we're hearing about video. Amy Scott asks, where does it end? Or where should it?


AMY SCOTT: Some are starting to wonder if Amazon is taking its name a little too far. The ever-growing online retailer now sells 34 categories of products.

You can buy anything from a leather sofa to a case of strawberry Jell-o. Analysts say that list will soon include downloadable TV shows and movies, though Amazon won't confirm that.

Stock analyst Philip Remek with Guzman & Company isn't thrilled with the idea. He says media downloads aren't big moneymakers because most of the revenue goes to pay royalties.

PHILIP REMEK: I would prefer if Amazon would actually pare back, in order to concentrate on higher margin items.

Items like higher-priced books and electronics. Amazon would also be up against existing download services like Movielink and Cinema Now.

Maybe the biggest hurdle? Most people still prefer to watch TV and movies on the television set.

In New York, I'm Amy Scott for Marketplace.

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