Amazon Takes On Netflix With Huge Original Content Budget
Amazon is planning to challenge Netflix head on in the battle for video streaming subscribers. During the company's recent earnings call, chief Jeff Bezos stated that Amazon plans to double its budget for original content in the second half of 2016 compared with that of the second half of last year.
What exactly that number will be is still something of a mystery, as Amazon has not released its budget for originally produced content since 2014, when the number was pegged at $1.3 billion. Even if a very conservative estimate of $1.5 billion is applied for 2015, that means Amazon will now be on track to spend a hefty $3 billion plus per year on original content.
We previously reported that Amazon had announced stellar earnings results for Q2 2016, largely in part due to the unexpected growth of the company's web hosting division, which ironically provides services to Netflix. It looks as if Bezos and company are earmarking a chunk of those new profits toward taking on its video streaming competitor, which recently reported weaker than expected subscriber numbers, sending its shares downward.
Netflix is still considered by a wide margin to offer the best original content according to a consumer survey that recently put it at the top, due to offerings such as Orange Is the New Black, Daredevil, Black Mirror, Unbreakable Kimmy Schmidt and Scrotal Recall which was recently renamed Lovesick for its second season. Twenty nine percent of viewers named Netflix as the video streaming service with the best original content, as opposed to former leader HBO which trailed with a distant 18 percent this year. Amazon tied with Hulu and Showtime in just a 4 to 5 percent range.
Bezos seemingly plans to change all that by throwing huge amounts of money to produce original series such as Transparent, The Man in the High Castle, Mozart in the Jungle and Catastrophe. The company's Amazon studios production arm, which has already planned releases this year such as Manchester by the Sea, The Handmaiden and Gleason will also benefit.
It also appears the new budget will move Amazon into first place in terms of spending on original content. Netflix is estimated to spend $2.5 billion on such programming this year, while HBO has an estimated $1.8 million budget. It looks like Amazon and Bezos are hoping that "Amazon Prime and Chill" becomes the new buzz phrase for watching streaming video, replacing the current "Netflix and Chill" in current vernacular.