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Amazon Looking to 'Double Down' on Original Content Spend

18 Jun, 2015 By: Erik Gruenwedel

Prime Instant Video may have tens of millions of subscribers, but are they streaming video?

Amazon Prime Instant Video, the free over-the-top streaming service offered to Prime members, is significantly upping spending this year on original content in an effort to stay competitive with SVOD market leader Netflix, among others, according to an executive.

In addition to its first Golden Globe wins (for “Transparent”), other original programming includes L.A. cop noire “Bosch,” teen series “Gortimer Gibbon’s Life on Normal Street,” “Mozart in the Jungle” and “Tumble Leaf,” winner of five Daytime Emmy Awards.

Netflix had been tracking nearly $10 billion in content obligations at the end of the first quarter (ended March 31) — $2.7 billion more than it spent during the previous-year period. Amazon, by comparison, spent about half that amount.

That is apparently changing, Jay Marine, VP of Amazon Instant Video in Europe, told CNBC.

"We're going to continue to double down in that area, invest more to bring our customers worldwide, more originals, more great TV series that they have never been able to see before," Marine said.

Indeed, Amazon earlier this year began producing and acquiring original movies for theatrical release and early distribution on Prime Instant Video.

“We look forward to expanding our production efforts into feature films. Our goal is to create close to 12 movies a year with production starting later this year,” Roy Price, VP of Amazon Studios, said in a statement at the time.

The e-commerce behemoth also greenlit five new original series, including “The Man in the High Castle;” hour-long dark comedy “Mad Dogs;” docu-series “The New Yorker Presents;” along with kids shows “Just Add Magic” and “The Stinky & Dirty Show.”

In addition to movies, Amazon is looking for content that separates Prime from other over-the-top video services. The company increased its mojo by signing Oscar-winning director Woody Allen to direct his first scripted TV programs. Fittingly, Allen appeared to question his decision in subsequent media interviews, saying he lacked the qualifications to create 30-minutes programming.

“I don't know what I'm doing. I'm floundering. I expect this to be a cosmic embarrassment when it comes out,” the 79-year-old director told the AP in May.

Regardless if Allen truly only recently became aware of Amazon (after his agent called him), or this is just pre-launch hype, Prime Instant Video needs more active viewers.

Netflix ended Q1 with 62 million subscribers globally, while Prime Instant Video has less than 14 million, according data released by IHS. Indeed, the latest primetime streaming traffic study released by Sandvine suggested Prime Instant Video traffic market share trailed Netflix 36.5% to 1.97%.

Amazon recently went old-school sending out letters by mail to select Prime subs inquiring whether they were aware of Prime Instant Video.

“I’m writing you this letter because you are an Amazon Prime member who has not yet used any of the video benefits that you’ve already paid for,” Michael Paull, VP of Amazon Prime Instant Video, wrote.

In the letter, Paull said he deals with Prime subscriber wondering whether Prime Instant Video is similar to Netflix. The executive said he wants users to be the judge, adding that it doesn’t cost more to try Prime Instant Video.

“It just makes sense to give it a try,” Paull wrote.


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