Amazon is doubling its investment in video as it steps up the war against Netflix
During its second quarter earnings call, Amazon CFO Brian Olsavsky said that Amazon will "nearly double" its investment in all types of video, while "tripling" the amount of Amazon's original content, over the rest of the year.
"We're very happy with the customer adoption of Prime Video...it's clearly working," Olsavsky said.
Olsavsky didn't add more details around the exact dollar amount of the investment or how Prime Video will expand globally. But he basically reaffirmed his comment from last quarter when he said that Amazon would "significantly" increase its video content spend in the backend of the year.
Olsavsky also pointed out that Prime Video plays a big role in free trial conversions and renewal rates for its Prime membership, a point Amazon CEO Jeff Bezos stressed in a recent interview. Basically, Amazon is using its video offerings to get more customers to shop on its site, so it doesn't have to sweat the margins. That's a huge competitive advantage against others who need to make money directly from video content.
Online video has been a growing focus area for Amazon lately. In a clear sign that it's going after Netflix, Amazon made its video service available to non-Prime members in April, launching a standalone video service that can be purchased month by month. Prior to that, Prime Video was only available through the $99 annual Prime membership, which gives access to two-day free shipping and a bunch of video and music content.
Amazon last disclosed its investment amount on video content back in 2014 when it spent a total of $1.3 billion. In the second quarter, Amazon said it spent $3.8 billion on "technology and content," but that includes everything from salaries and infrastructure cost related to its content offerings.