July 31, 2014
Amazon plans to beef up its investments in original, Web-only, video programming. The company’s CFO Tom Szkutak explained that Amazon is slated to spend about $100 million on “many new pilots” during Q3 2014. Amazon’s Prime Instant Video has been trying to keep up with Netflix, but has yet to reach the success of hits such as “House of Cards” and “Orange Is the New Black.” However, $100 million was the amount Netflix gambled on the first two seasons of “House of Cards” alone.
“Part of the reason for the original content spend might be Amazon’s Prime membership, which Szkutak said grew faster in the second quarter — than in Q2 of 2013,” reports VentureBeat.
“The fact that Szkutak let drop such a nugget might mean that Amazon is preparing to get its game on with regard to original video. Its rival Netflix has proved that original content can drive up subscriber count. Netflix just crossed the 50 million subscriber mark.”
Netflix has been using the success of its original series to cast itself more as a TV network than its early business model. Meanwhile, the company spends no more than 10 percent of its content budget on originals.
“Amazon has been chasing Netflix’ originals strategy to keep its Prime Instant Video service, a component of its $99 Prime program best known for free second-day shipping, competitive,” explains CNET. “Where Netflix series have snagged top awards and quickly become standard discussion around the watercooler, Amazon’s have yet to catch up.”
However, Amazon is planning more originals over the next two years, and is “green-lighting more pilots with high-profile names attached — some of which are generating early buzz,” suggests CNET.