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"Amazon hasn't gotten to the place yet where it has put together all of the levers that would make the video opportunity great," said Fred Seibert, the founder of independent production studio Frederator Networks, which is launching the animated show Costume Quest on Prime Video on Friday. "But five years from now, they're going to be one of the giants in media. There's no doubt about it."
If same-day and two-day delivery, Whole Foods discounts and unlimited music aren't enough, perhaps your addiction to "The Marvelous Mrs. Maisel," "Catastrophe" or "Lord of the Rings," plus a steady stream of exclusive feature-length films, will keep you happy. Jennifer Salke, who took the helm of Amazon Studios about a year ago, told the Hollywood Reporter last month that her strategy in acquiring content is to enhance Prime and "invest in things that we think will be great for the service."
Stephen Desaulniers | CNBC
Jeff Hirsch
Amazon will spend $5 billion to $6 billion this year on content, according to an estimate from BTIG media analyst Rich Greenfield. That is a decent-sized bet for Hollywood but a tiny fraction of Amazon's operating expenses, which topped $220 billion last year. Netflix will likely spend about $15 billion on content this year, Greenfield estimated.
Like Salke, Price's stated strategy was to invest in shows that supported Prime. Amazon looked at who was watching a given show and saw how much that person was using Prime for other perks, mainly free shipping. If a Prime subscriber watched a show a lot and wasn't taking advantage of Prime's other benefits, the show got credit for that customer's subscription dollars, according to people familiar with Amazon's internal methods.
Amazon didn't make Salke available for an interview for this story. An Amazon spokeswoman declined to comment for the story.
- With assistance from Michelle Castillo
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