Amazon will dedicate an estimated $4.5 billion on video content this year, narrowing the spending gap between the Seattle e-commerce giant and competitor Netflix, which has a budget of $6 billion for the year. Those estimates come from analysts at J.P. Morgan.
A decade ago, Netflix execs probably would have laughed at the idea of Amazon becoming one of their top adversaries. Of course, a decade ago, Netflix was still mailing DVDs. When it comes to technology, there are no crystal balls.
Netflix is still king, as far as streaming spend goes. But Amazon clearly has a mind to dethrone it, nearly doubling its spending on video each year for the past three years. HBO is also a worthy contender, though less is known about its projected content budget for 2017. Time Warner CEO Jeff Bewkes characterized the budget as “ a couple of billion dollars,” in December.
The numbers show just how big Amazon is betting on video streaming, which is one of the perks of its $99 per year Prime membership. Last week, Amazon reportedly inked a $50 million deal to stream 10 Thursday Night Football NFL games next season. The company doubled its video content spend in the second half of 2016 compared to the same period in 2015 and nearly tripled its new Amazon original series and movies.
All of these resources are intended to make Prime as appealing as possible to as many customers as possible. In addition to video, Prime members get free 2-day shipping, music streaming, cloud storage, and other perks.