Amazon doubling content spend, tripling originals

Amazon is dramatically ramping up its spending on original content, telling investors it will almost double its programme budget for the second half of the year, while tripling the number of original shows on its Prime Instant Video streaming service.

The bold commitment to programming comes as its chief SVOD rival Netflix ramps ups its spending and original content.

Like Netflix, Amazon is also expected to expand internationally in the coming months, and yesterday its execs confirmed plans to rollout out TV streaming in India.

The e-commerce giant reported strong quarterly financial yesterday, beating analysts estimates. Speaking to analysts after the results announcement, CFO Brian T. Olsavsky said content costs will increase through the second half of the year.

“We are also nearly doubling our content spend in the second half of this year versus the second half of 2015,” Olsavsky said. “We have a great slate of new Amazon Originals coming out later this year, both in the US and internationally, and we’re nearly tripling our number of new Amazon Original shows – TV shows and movies – compared with the second half of last year.”

Year-on-year the US company said it was tripling the amount of originals on its service in 2H16. Olavsky added that original content plays a key role in converting free trials to paying subs and driving consumers to the wider Prime service.

The Amazon CFO also confirmed SVOD will roll out in India, where the core Prime service launched this week. “We’ll be having video soon in India, but local content and also Amazon Originals,” he said. “So, stay tuned for that.”

Amazon has been adding to its roster of originals, but the latest statements underline a new level of ambition, although management did not quantify the company’s spending on acquired and original content, or the number of people accessing its streaming service.

Its top original titles include The Man in the High Castle, and flagship series, Jeffrey Tambur comedy drama Transparent (pictured). It has also invested heavily in original kids programming and moved into entertainment, with upcoming Top Gear competitor The Grand Tour.

Company wide, second quarter revenue was up 31% in the second quarter to US$30.4 billion. Net profit was US$857 million, its largest ever for a single quarter.