Amazon spent $16.6B on video, music content in 2022

Amazon poured significant investment into content enhancements last year, disclosing this week it spent a total of $16.6 billion on digital video and music content in 2022 – up from $13 billion in 2021.

Approximately $7 billion went towards Amazon originals, live sports and licensed third-party video content, said Amazon CFO Brian Olsavsky on the company’s Q4 earnings call. He didn’t break down how much was spent within each category but noted the company in 2021 spent $5 billion across those three areas.

As for the $16.6 billion figure, Amazon disclosed the sum in its annual SEC filing, which states expenses include “licensing and production costs associated with content offered within Amazon Prime memberships, and costs associated with digital subscriptions and sold or rented content.”

The fourth quarter saw Amazon complete the first season of “Lord of the Rings: The Rings of Power, which came at a staggering production cost of $60 million per episode, according to VPN Overview. Also, Amazon just wrapped up its first year streaming the NFL’s Thursday Night Football – a package that’s costing the e-commerce giant $1 billion annually.

“We regularly evaluate the return on the spend and continue to be encouraged by what we see, as video has proven to be a strong driver of Prime member engagement and new Prime member acquisition,” Olsavsky said.

“The Rings of Power” was the most watched Amazon original in every region of the world, he added, with the series driving more Prime membership sign-ups “than any previous Prime Video content.”

All told, more than 100 million viewers worldwide tuned into “The Rings of Power,” which raked up over 24 billion minutes streamed. Production for the second season is already underway.

As for Thursday Night Football, Amazon boasted viewership among ages 18-34 was up 11% from 2021. Games for the first season received an average audience of 11.3 million viewers, according to combined data from Amazon’s first-party measurement and Nielsen.

In March of last year, Amazon acquired Hollywood studio MGM for $8.45 billion, bringing IP such as the James Bond franchise to Amazon’s library. Perhaps the most notable third-party addition to Prime Video was the return of HBO Max, which will combine with Discovery+ this year.

Separately, a report from The Information in December suggested Amazon is thinking of launching a standalone sports streaming app, but it’s unclear how far the company is in the platform’s development process, or whether Amazon will release it at all.

Speaking on the earnings call, Amazon President and CEO Andrew Jassy touted the value of a Prime membership due to its various components.

“If you step back and think about a lot of subscription programs, there are a number of them that are $14, $15 a month really for entertainment content, which is more than what Prime is today,” said Jassy.

“If you think about the value of Prime, which is less than what I just mentioned, where you get the entertainment content on the Prime Video side and you get the shipping benefit,” along with features like gaming, groceries and medication prescriptions, “that is remarkable value that you just don’t find elsewhere,” he added.