April 16, 2021
Among streamers such as Netflix, Disney+, HBO Max, Hulu and Peacock, Amazon Prime Video remains relatively under the radar when it comes to publicized content spending.
So when founder/CEO Jeff Bezos released his final shareholder letter April 15, the world’s richest man threw out a lot of big numbers befitting a company tagged on Wall Street as No. 1 in market valuation. Not to be overlooked in the data dump: $11 billion in content spend on movies, TV shows and music in 2020. That’s up 41% from $7.8 billion in combined content spending in 2019.
Netflix spent $11.8 billion on content in 2020, which was actually down almost 15% from $13.9 billion spent in 2019.
Amazon in recent years reduced content production as it focused monies on high-profile license agreements such as “NFL Thursday Night Football,” according to analyst Michael Pachter with Wedbush Securities in Los Angeles. He says Amazon is positioning to resume releasing original content at a steadier clip, as it had in the past. Amazon Studios recently installed a new, more comprehensive TV development team in place.
“We view [the move] as a way [for Amazon] to remain relevant in the face of heightened competition from various other streamers,” Pachter wrote in a note.
Separately, Bezos said the e-commerce pioneer created $126 billion in “value creation” economic benefit to consumers in 2020. He said most Amazon consumers complete 28% of their online purchases in three minutes or less, and half of all purchases are finished in less than 15 minutes.
When compared to the typical shopping trip to a physical store — driving,
parking, searching store aisles, waiting in the checkout line, finding your car, and driving home. Bezos said research suggests the typical physical store trip takes about an hour.
“If you assume that a typical Amazon purchase takes 15 minutes and that it saves you a couple of trips to a physical store a week, that’s more than 75
hours a year saved,” Bezos wrote.
Indeed, when valuing the time saved shopping through e-commerce at $10 per hour, Bezos estimates the average Amazon Prime member created $630 in annual “value creation” for themselves. A tally that skyrockets to $126 billion when multiplied by 200 million Prime members.
“That’s important,” wrote Bezos.