The History and Success of Amazon

The History and Success of Amazon

Oftentimes, people in the entertainment industry wonder what Amazon’s strategy really is. Amazon has been in the streaming industry for almost as long as Netflix has been, and the problem with this is that Amazon has far less to show for it in terms of being a streaming service (for now). Why? Well, for starters – in an average week, Amazon has maybe one or two of the most popular original series shows streaming in the U.S., while Netflix has about seven or eight of the most popular original series shows in any given week. Not to mention that the most popular original movies that Amazon has showcased on their streaming platform were bought from other studios. 

With that being said, Amazon Prime Video has certainly struggled with defining exactly what it is. However, the issue definitely does not stem from a budgeting problem. In fact, Netflix has spent significantly more than Amazon has over the past 10 years, producing a much higher volume of shows. Amazon Studios has a budget of $10 billion, and that same budget is strikingly similar to what Netflix and many other streaming companies are spending. 

And even though Amazon has not produced the same volume of shows as Netflix and others, it is certainly not under par. This is because Amazon has taken a vastly different approach compared to other major companies in the entertainment industry. How is this so? Well, Amazon doesn’t fund TV shows with the sole purpose of making money from them – and definitely not on a standalone basis. Instead, they do it to lure in consumers into the Amazon ecosystem and marketing other types of products.

However, there isn’t enough data out there to prove if Amazon’s spending on shows has lured in people to become Prime subscribers and maintain their subscription. What we do know is that Amazon has become an extremely successful company, bringing in $470 billion in sales and $33 billion in net income in 2021 alone. In addition, its advertising sector is undoubtedly booming. And while Amazon’s video service is the second largest contributor for new subscribers to Prime following shipping, we aren’t exactly sure what this means just yet.

Given the fact that the company has what seems to be unlimited resources, what exactly is their strategy? Think about it – Amazon is not stressing about attracting and maintaining subscribers, like Netflix and Disney may stress about it. But still, many people in the industry are wondering whether Amazon will lose interest and shut down its entertainment sector altogether like Microsoft and Yahoo. While that is a possibility, any company, including Amazon, wouldn’t just purchase MGM for $8.45 billion and commit to an 11-year football contract if the plan was to give up on the entertainment sector any time soon.

But there have been signs that Amazon has figured out its identity as a streaming service, given that more shows such as, “The Terminal List,” “The Boys,” “Outer Range,” and “The Wheel of Time” have captured large audiences. These shows cater to more of the modern consumers of Amazon’s subscribers. In addition, the 11-year football contract that Amazon signed on will be the exclusive to the company for years to come. There’s also a large bet on “Lord of the Rings,” as it will most likely bring on a huge audience to the Amazon ecosystem.

Based on these new additions and much more to come, it seems likely that Amazon will be on a hot streak for some time in its entertainment sector of the business. 

As more streaming services brace themselves for what’s to come for Amazon, competition will intensify among the streaming conglomerates. One of the many benefits of Amazon and what sets them apart from the competition, is that its Prime subscriptions have bundled services, unlike many other streaming services on the market. With that being said, Amazon has a reduced risk of subscription cancellations. Because of this, more streaming services will likely hop on the bandwagon of bundled services to minimize any risk of subscription cancellations. The good news is that Amazon doesn’t have to have that fear. This could mean substantial and long-term growth for Amazon and its many services altogether.

About Vedette Finance

Vedette Finance, founded by Tarek Anthony Jabre, in 2012, is a film development and finance company, with a wide-reaching international network of finance and talent. The company’s fundamental objective is to develop its premium value slate, creatively, and structure the financing, to maintain a steady output of high-quality film releasing. For more information, visit www.VedetteFinance.com