Amazon to spend over $4bn on video to take on video rivals this year
Analysts at JPMorgan are saying that Amazon will spend a whopping $4.5bn on video in 2017, which will bump it up towards rival Netflix, according to a story in the Business Insider.
Amazon spending billions to compete with Netflix in video
Amazon chief financial officer Brian Olsavsky had said back in July of 2016 that the company would ‘nearly double’ its investment in video and would triple the amount of original content in its Prime Video offering over the rest of last year. The new estimate by JPMorgan for 2017 hints that spending will continue a steep upward trend.
The approximate numbers for Amazon video spending would still keep it below Netflix’s $6bn content budget for 2017, however, but would cement Amazon as a top player in the video market. The Business Insider story noted that HBO spent roughly $2bn on programming in 2016 and cited Time Warner CEO Jeff Bewkes as saying that budget would rise slightly this year.
Amazon continues to add new programming after it launched Prime Video globally in over 200 countries in December, with original shows like the $250m The Grand Tour and The Man in the High Castle – it’s most popular so far. While the shows are expensive, Amazon Studios boss Roy Price said they are key for the business.
Aside from original shows, Amazon recently won the rights to stream 10 Thursday night NFL games in a $50m deal, similar to the one Twitter had last season. The games will only be available with Amazon Prime Video.
“We’re focused on bringing our customers what they want to watch, Prime members want the NFL,” Amazon senior vice president Jeff Blackburn told the Business Journal.
With its growing video success, Amazon may be eyeing cable and satellite TV, which is seeing much more competition from the streaming world via YouTube, Hulu, AT&T and others.