Wednesday, January 25, 2023

Is Amazon Spending Too Much to Grow Prime Memberships?

Amazon's content expense increased by $2 billion through the first nine months of 2022, up over 20% year over year. Keep in mind that only includes a portion of The Lord of the Rings: The Rings of Power series it debuted in September and Thursday Night Football, which premiered that same month. Both cost Amazon hundreds of millions of dollars to obtain the rights to and produce. So investors should expect a substantial increase in content expenses in the fourth quarter.
To its credit, the increase in content spending appears to be paying off. Prime Video had more paid subscribers watching its service than any other streaming service in 2022, according to a report from Parks Associates. And while big events like Thursday Night Football appear to be attracting subscribers, it might not be enough to offset shoppers leaving the program.
From the article, "Is Amazon Spending Too Much to Grow Prime Memberships?," by Adam Levy.

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