November 21, 2016
Amazon is expected to debut its streaming Amazon Prime Video in about 200 countries and territories, say sources close to the matter. Although a launch in India was already announced, Prime is currently only available in the U.S., U.K., Germany, Austria and Japan. The news was leaked by Jeremy Clarkson, star of the upcoming Amazon automotive show “The Grand Tour,” who tweeted that “Amazon has gone global,” with the show to be available in 200 territories. With a global reach, Amazon will be in direct competition with Netflix.
The Wall Street Journal reports that Amazon’s website “confirmed that ‘The Grand Tour’ would stream on its site exclusively, worldwide,” but made no other statements about a planned international rollout.
After a major international expansion in January, Netflix is currently available in 190 countries, nearly everywhere except China and North Korea. If Amazon enters the international market, it would be “another deep-pocketed tech company with strong Hollywood connections … vying for a piece of the streaming market.”
Ampere Analysis predicts that, “Amazon’s global rollout will likely lead to higher costs — potentially on the order of $4 billion to $5 billion in annual outlays on video.”
Adding in spending on faster shipments, warehouses and other services “caused Amazon to miss Wall Street’s profit expectations for the third quarter” and post “its lowest quarterly profit in a year.” Investors are worried about Amazon’s spending, but the company says it will “continue to invest heavily into the fourth quarter.”
According to Amazon chief financial officer Brian Olsavsky, “investment in video and marketing of shows was on track to nearly double year over year in the second half of 2016,” noting that the company is seeing “significant customer traction” with regard to video. What is unclear in the event of a global launch is how deep Amazon’s content library is. Although it owns the rights to its original shows, such as “Transparent,” the service “likely doesn’t have such rights for all its licensed content.”
WSJ says that Netflix and Amazon have “differed on their international approach until now,” with Netflix buying shows and movies with an eye toward international popularity and Amazon “building up its video service deliberately in just a handful of markets by hiring local teams and investing heavily in regional original series.”