Business Insider reports that Amazon is working on a new “paid subscription plan” for its Alexa voice assistant platform that could debut later this year.
Here’s how Business Insider frames the initiative:
“Tentatively called ‘Alexa Plus,’ the paid version of Alexa is intended to offer more conversational and personalized AI technology, said one of the documents obtained by Business Insider. The team is working towards a June 30 launch deadline, and has been testing the underlying voice technology, dubbed ‘Remarkable Alexa,’ with 15,000 external customers, these people said.
“But the quality of the new Alexa’s answers is still falling short of expectations, often sharing inaccurate information, external tests have found. Amazon is now going through a major overhaul of Alexa’s technology stack to address this issue, though the team is experiencing some discord. The people who spoke to BI requested anonymity because they were not authorized to speak to the press. Their identities are known to BI.
“Despite its early success in becoming a household name, Amazon’s Alexa voice assistant has struggled to build a feasible business model, leading to major layoffs and cost cutting measures over the past year. The new subscription plan, which will be backed by a super-powered version of Alexa, represents Amazon’s latest attempt to revive the voice technology that was once considered the key to its future.”
One of the insiders said that if this doesn’t work, and it doesn’t generate revenue for Amazon, then “Alexa is in trouble.”
KC’s View:
This is what happens on Day Two at Amazon.
On Day One, the strategy is to build a company that innovates on so many levels and has its fingers in so many pies, that, as Jeff Bezos once said, it is almost irresponsible not to be an Amazon Prime member. The goal was to extract lifetime customer value.
On Day Two, the goal seems to be to extract as much money from customers as possible, wherever and whenever possible. Even it diminishes the customer experience.
There’s nothing inherently wrong with that. Amazon management does have a fiduciary responsibility to maximize company value, and different managers are going to pursue this goal in a variety of ways. And to be clear, Amazon continues to be a strong engine of innovation, and an economic powerhouse.
But it seems pretty clear that today is Day Two.
The ironic thing about this development is that with Alexa, Amazon would appear to be in prime position – pun intended – to take advantage of chat-enabled AI’s evolution. Amazon has to be careful not to make moves that while they make Alexa more useful, they also start charging to the point that people start unplugging it.
By the way, I’d like to point out that when Tom Furphy and I did our 2024 predictions segment, one of mine was that this year, Amazon will exit a business sector previously seen as core. The two I identified as likely were the physical stores business and the Alexa voice assistant business, largely because the company’s priorities have shifted and its tolerance for economic pain is less than it used to be. Neither has happened, yet – but we’re only 18 days into the new year.
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