Post by The Ultimate Nullifier on Jan 31, 2015 18:59:45 GMT -6
variety.com/2015/news/amazon-spent-1-3-billion-on-prime-instant-video-in-2014-1201418708/
E-commerce giant touts investment in SVOD content but still trails Netflix in spending
Todd Spangler
NY Digital Editor
@xpangler
Amazon.com, which is gunning for Netflix in the subscription-video space, invested $1.3 billion in its Prime Instant Video last year, according to founder and CEO Jeff Bezos.
Netflix, by contrast, spent $3.8 billion in 2014 on additions to its streaming-content library globally — nearly three times as much as Amazon — up from $3 billion the year prior.
Bezos revealed the video-spending figure — a level of detail the e-commerce behemoth normally doesn’t provide — as part of announcing Amazon’s fourth quarter 2014 earnings. He touted growth in Prime membership last year, despite a 25% price hike to $99 per year. Amazon’s Prime worldwide paid membership grew 53% last year, and 50% in the U.S. However, the company does not disclose specific numbers Prime users, except that it amounts to “tens of millions.”
“Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid,” Bezos said in a statement. “In 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We’ll continue to work hard for our Prime members.”
On the earnings front, Amazon handily beat Wall Street expectations for Q4 with net income of 45 cents per share, well above analysts consensus estimates of 17 cents per share. Revenue increased 15%, to $29.33 billion, missing analyst estimates of $29.7 billion for the period. In after-hours trading, Amazon stock climbed more than 7%.
Prime offers free two-day shipping on millions of products as well as access to Prime Instant Video, music and other content. According to a survey by Morgan Stanley, the company had at least 50 million Prime members worldwide as of October 2014, implying at least 37 million in the U.S. But it’s not clear how many of those access Prime Instant Video on a regular basis.
As of the end of 2014, Netflix had 57.3 million streaming subs worldwide (39.11 million U.S. streaming subs and 18.28 million internationally).
The total content-spending figures from Amazon and Netflix illustrate that — while they are using original content to generate buzz, aimed at attracting and retaining subs — the bulk of their budgets go toward licensing TV shows and movies from Hollywood. Netflix execs have said they expect to continue to spend 10% of the company’s overall content outlay on original programming. In 2015, Netflix, Amazon and Hulu will spend a projected $6.8 billion on content licensed from studios, versus $5.2 billion last year, according to an RBC Capital Markets report.
In its earnings announcement, Amazon called out its Golden Globes wins for “Transparent,” its original dark comedy series from Jill Soloway and starring Jeffrey Tambor. The company also highlighted Amazon Studios’ new initiative to produce and acquire 12 original movies for theatrical release and early-window distribution on Prime Instant Video this year, as well as its deal with Woody Allen for the filmmaker’s first TV series.
E-commerce giant touts investment in SVOD content but still trails Netflix in spending
Todd Spangler
NY Digital Editor
@xpangler
Amazon.com, which is gunning for Netflix in the subscription-video space, invested $1.3 billion in its Prime Instant Video last year, according to founder and CEO Jeff Bezos.
Netflix, by contrast, spent $3.8 billion in 2014 on additions to its streaming-content library globally — nearly three times as much as Amazon — up from $3 billion the year prior.
Bezos revealed the video-spending figure — a level of detail the e-commerce behemoth normally doesn’t provide — as part of announcing Amazon’s fourth quarter 2014 earnings. He touted growth in Prime membership last year, despite a 25% price hike to $99 per year. Amazon’s Prime worldwide paid membership grew 53% last year, and 50% in the U.S. However, the company does not disclose specific numbers Prime users, except that it amounts to “tens of millions.”
“Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid,” Bezos said in a statement. “In 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We’ll continue to work hard for our Prime members.”
On the earnings front, Amazon handily beat Wall Street expectations for Q4 with net income of 45 cents per share, well above analysts consensus estimates of 17 cents per share. Revenue increased 15%, to $29.33 billion, missing analyst estimates of $29.7 billion for the period. In after-hours trading, Amazon stock climbed more than 7%.
Prime offers free two-day shipping on millions of products as well as access to Prime Instant Video, music and other content. According to a survey by Morgan Stanley, the company had at least 50 million Prime members worldwide as of October 2014, implying at least 37 million in the U.S. But it’s not clear how many of those access Prime Instant Video on a regular basis.
As of the end of 2014, Netflix had 57.3 million streaming subs worldwide (39.11 million U.S. streaming subs and 18.28 million internationally).
The total content-spending figures from Amazon and Netflix illustrate that — while they are using original content to generate buzz, aimed at attracting and retaining subs — the bulk of their budgets go toward licensing TV shows and movies from Hollywood. Netflix execs have said they expect to continue to spend 10% of the company’s overall content outlay on original programming. In 2015, Netflix, Amazon and Hulu will spend a projected $6.8 billion on content licensed from studios, versus $5.2 billion last year, according to an RBC Capital Markets report.
In its earnings announcement, Amazon called out its Golden Globes wins for “Transparent,” its original dark comedy series from Jill Soloway and starring Jeffrey Tambor. The company also highlighted Amazon Studios’ new initiative to produce and acquire 12 original movies for theatrical release and early-window distribution on Prime Instant Video this year, as well as its deal with Woody Allen for the filmmaker’s first TV series.