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Recode Daily: Amazon is risking customer trust in its pursuit of being the “everything store”

Plus: NY Gov. Andrew Cuomo is working to woo Amazon back; streaming revenue accounted for 75 percent of the US music industry’s total revenue; Martha Stewart teams up with a Canadian cannabis company.

Two men working at an Amazon fulfillment center check the boxes moving down a conveyor belt.
Men work at a distribution station in the 855,000-square-foot Amazon fulfillment center in Staten Island, on February 5, 2019.
Johannes Eisele / AFP / Getty Images

Amazon has recruited millions of small- and mid-sized businesses to sell their products on its Amazon Marketplace platform in its ambition to create an “everything store” that sells “every genuine product in the world.” During the holiday season, these third-party sellers accounted for more than $13 billion of Amazon’s revenue; in 2018, more than 50,000 of them brought in more than $500,000 each from Amazon. But as Amazon gives more of these third parties access to its global store, the opportunities for scammers and bad actors to plot nefarious things multiplies, endangering customer trust. And “as Amazon’s megastore grows and becomes more popular, so does the risk that it blows itself up.” [Jason Del Rey / Recode]

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Meanwhile, New York Gov. Andrew Cuomo is reportedly working behind the scenes to lure Amazon back to his state after the retail giant’s stunning decision to abandon its plans to build a second headquarters in Queens, New York. The Amazon deal had promised to create 40,000 jobs in Long Island City in exchange for tax breaks that would have exceeded $2 billion. Cuomo is said to have had multiple phone conversations with Amazon executives — including CEO Jeff Bezos — and said he would help the company navigate the complicated governmental process. “I do believe Amazon should have stayed and fought the opposition,” Cuomo said in a radio interview. “It was a vocal minority opposition. Seventy percent of the people support Amazon.” [J. David Goodman / The New York Times]

YouTube is disabling the comment sections on video channels that feature children. The move comes after major corporations including Disney, Nestle, AT&T, and Fortnite maker Epic Games paused their ad spending after it was discovered that their ads were playing adjacent to videos featuring young people that had predatory comments on them. “A YouTube spokesperson told The Verge that although the company understands comment sections are important to creators as way of measuring engagement, ‘we also know that this is the right thing to do to protect the YouTube community.’” [Julia Alexander / The Verge]

Dell reported “marginally better-than-expected quarterly revenue growth but a higher-than-expected net loss” in its first quarter as a newly public company. The computer, storage, and data center services giant reported 9 percent revenue growth centered in servers and networking gear, and Dell’s share of the returns from its 80 percent ownership of computing virtualization giant VMware, which also reported surprising results. Dell reported that its net loss for Q4 2019 more than doubled from a year ago, to $287 million, on revenue of $23.84 billion; the company earned an operating profit of $2.7 billion. [Robert Hof / Silicon Angle]

Revenue from streaming services like Spotify accounted for 75 percent of the US music industry’s total revenue in 2018, with CD sales making up 12 percent, digital downloads bringing in 11 percent, and synch at 3 percent. The music industry marked its third consecutive year of double-digit growth, according to the year-end revenue report issued by the Recording Industry Association of America, which said “recorded-music revenues rose 12 percent to their highest level in 10 years — $9.8 billion, up from $8.8 billion the previous year but still below 2007’s $10.7 billion.” Total subscription revenue increased 32 percent to $5.4 billion. “Stream-ripping, and a lack of accountability for many Big Tech companies that drive down the value of music, remain serious threats as the industry strives for additional growth,” said Mitch Glazier, the RIAA’s new chairman and CEO, in a blog post. [Jem Aswad / Variety]

Top stories from Recode

Google employees won a battle against forced arbitration. Now they’re pushing for nationwide legislation. Tech workers have helped minimize the controversial employment practice within their industry, and now they’re pushing to stop it at a national level. [Shirin Ghaffary]

Spotify and Warner Music are fighting, so Spotify users in India can’t listen to Cardi B or Ed Sheeran. Big Tech and Big Music are used to being frenemies. Now things are getting feistier. [Peter Kafka]

Visa approvals for tech workers are on the decline. That won’t just hurt Silicon Valley. More tech work could head overseas as the US allows fewer tech workers into the country. [Rani Molla]

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