Amazon Increases Media Content Spending to Nearly $19 Billion in 2023

Amazon's annual report reveals that its investment in media content has surged to nearly $19 billion this year.

As one of the leading US tech giants, Amazon owns prominent platforms like Amazon Prime, Amazon Music, Twitch, and Audible.

According to Variety, Amazon's expenditure on TV shows, movies, and music reached $18.9 billion in 2023, marking a 14% increase from the $16.6 billion spent the previous year. This information was disclosed in the company's 10-K annual report filed with the US Securities and Exchange Commission.

The reported figures encompass licensing and production costs for content across Amazon Prime and other digital subscriptions, rentals, and sales.

In comparison, Netflix spent around $13 billion on content acquisition and production in 2023 and plans to raise this amount to $17 billion in 2024.

Amazon's Strategic Growth

Following this significant spending increase, Amazon held its Q4 2023 Earnings Call on Thursday, expressing confidence in the growth potential of Amazon Prime as a standalone profitable business.

CEO Andy Jassy commented, “We believe Prime Video can become a large and profitable business on its own. We’ll continue to invest in exclusive content for Prime members, such as Thursday Night Football, Lord of the Rings, Reacher, Mr. & Mrs. Smith, Citadel, and more.”

He also discussed the recent introduction of ads on Prime Video starting January 29, with an option for subscribers to pay an additional $2.99 per month for an ad-free experience. This initiative is expected to generate an extra $3 billion in revenue in 2024.

Amazon's content spending includes a significant rights deal with the NFL, valued at around $1 billion annually over an 11-year contract, for exclusive streaming of Thursday Night Football. Jassy highlighted the success of Prime Video’s second season of TNF, which saw a 24% increase in viewership.

However, this sense of achievement is contrasted by recent layoffs affecting hundreds of Amazon employees across various subsidiaries, including a 35% reduction in Twitch’s workforce. Amazon's largest corporate cut occurred in 2022, with 27,000 positions eliminated.