Amazon CFO: Studio Investment Slowed Due to COVID-19

Despite outsized revenue in its most-recent fiscal quarter, Amazon July 30 disclosed it has slowed investment in studio productions largely due to the ongoing coronavirus pandemic.

The studio spent about $6 billion on original content in 2019, a figure it was expected to expand in 2020 before the pandemic, while not matching Netflix’s reported $17 billion+ content budget.

Speaking on the fiscal call, CFO Brian Brian Olsavsky said spending reductions at Amazon Studios have not been done for cost savings, but rather for “people reasons.”

Olsavsky said Amazon Studios, like most studios, has delayed productions of original TV shows and movies due to COVID-19, a reality that prompted rollout of Amazon Cinema, which offered Prime members access to new-release movies at premium VOD pricing.

“In this time when people want entertainment, people are having trouble creating new content across the board, which is a bit of a challenge,” he said. “It’s not something we’re doing intentionally. It’s something we’re doing to protect the actors and film crews. We think that is the right decision.”

Olsavsky, without giving specifics, said some things have changed in the “entertainment area” due to the pandemic and that Amazon Studios is adapting to changes in consumer access and acquisition of home entertainment.

“[Home] entertainment is seeing usage growth [due to the pandemic],” he said. “It’s a bifurcated world out there.”

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