As the streaming video conflicts heat up, so does the amount of money spent on content by the main competitors. Amazon used its funds to create original content for Prime Video and to compensate musicians via Amazon Music.
Introduction
According to Amazon’s annual report, the company spent $13 billion on video and music content in 2021.
The report said that the total video and music spent includes licensing and production costs. This is in relation to Amazon Prime membership material. It also includes costs associated with digital subscriptions and sold or rented content.
In other words, it covers the costs of Prime Video productions such as The Boys, as well as the production of the company’s Thursday Night Football broadcasts. The funds also pay musicians for its Amazon Music service.
Table of content
- How much does Amazon spend on video and music content?
- Amazon’s revenue from its investments
- The introduction of new and original content on Prime
- Is there a rise in prices of Amazon services?
How much does Amazon spend on video and music content?
Despite rising expenses, Amazon nevertheless spends less than many of its competitors. This demonstrates how its streaming video business is considered as a complement to the broader Prime bundle rather than a stand-alone operation. In fiscal 2021, Netflix spent $17 billion on content, whereas Disney plans to spend $33 billion on content in fiscal 2022.
Amazon increased the price of its Amazon Prime memberships by $20 on Thursday. They cited the considerable expansion in Prime Video content as one of the causes of its decision. The corporation also mentioned the expansion of services such as sales day delivery and pharmacy delivery.
With the corporation taking over Thursday Night Football entirely next season in a deal that is expected to cost $1 billion per year on its own, and high-profile titles like The Lord of the Rings commanding nine-figure price tags for each season, content spending is expected to skyrocket.
Last year, Amazon spent $13 billion on video and music content, an increase of approximately 18% from the year before. In its annual SEC filing, the e-commerce behemoth revealed total video and music expenses for 2021.
Amazon’s revenue from its investments
As of the end of 2021, total capitalized costs for video and music were $10.7 billion. Amazon’s capitalized video content has a weighted average remaining life of 2.6 years.
Amazon agreed to buy MGM for $8.45 billion in cash, including the studio’s debt, in May 2021. The purchase is subject to regulatory approval, and Amazon did not provide an update on the MGM deal.
Amazon’s subscription revenue for the entire year 2021 was $31.8 billion. This was up 26% year over year. This category includes Amazon Prime annual and monthly payments, as well as digital video, audiobooks, and other subscription services.
Amazon’s fourth-quarter financial report was the first to break out Advertising sales. This reached $9.72 billion for the quarter and $31.2 billion for the full year of 2021. This sector includes the sales of advertising services to sellers, suppliers, publishers, authors, and other parties. It also includes programs such as sponsored advertisements, display, and video advertising.
The introduction of new and original content on Prime
‘The Wheel of Time,’ was the No. 1 original series in Nielsen’s rankings the week of its launch. U.S. customers watched an estimated 1.16 billion minutes of the series across its first three episodes, according to Amazon’s Q4 results announcement.
The comedy “Harlem,” the adult animated comedy “Fairfax,” and the last season of sci-fi fan favorite “The Expanse” have all recently premiered on Prime Video. The first season of “Reacher,” will begin soon. “Diabolical,” an animated offshoot of the smash superhero satire “The Boys,” will premiere later in 2022.
The fourth and last movie of the animated family saga “Hotel Transylvania: Transformania,” debuted on Prime Video in the quarter.
“Judy Justice,” starring TV’s famed family court judge Judy Sheindlin, has debuted on Amazon’s IMDb TV free streaming service. This is Amazon Studios’ biggest order of episodes for an original show and its first show to be released every day.
Meanwhile, in December, Amazon Music exclusively broadcast Kanye West’s first headlining concert in five years. It will also feature special guest Drake, on the Amazon Music Twitch Channel, Prime Video, and the Amazon Music app.
Is there a rise in prices of Amazon services?
Amazon has raised the price of its Prime membership program in the United States by 17%. They cited benefits such as increased investment in high-quality digital entertainment as well as rising wages and transportation costs.
Licensing and production costs related to content supplied on Prime Videos, as well as costs associated with digital subscriptions and sold or rented content, make up Amazon’s total video and music spend.
