Amazon's $1 billion LOTR 'Rings of Power' is losing the ratings and viewer battle to HBO's 'House of the Dragon'

• Amazon's "Lord of the Rings" spinoff, "The Rings of Power," launched on Prime Video September 1.
• The company has reportedly spent nearly $1 billion developing the streaming video series.

Amazon's $1 billion bet on its new "Lord of the Rings" streaming TV series is falling flat with initial audiences, posing risks for Amazon Studios and the company's Prime membership program.

Though critics have praised the series' scope and ambition, "The Rings of Power" has rankled with audiences, who gave the show a 39% rating on Rotten Tomatoes. (By contrast, Peter Jackson's early 2000s Lord of the Rings trilogy earned audience scores of between 86-95% on Rotten Tomatoes.) Even on Amazon-owned IMDb, audiences rated "The Rings of Power" an anemic 6.8/10.

HBO's "House of the Dragon," released last month, is performing much better. It has an 8.8/10 rating in IMDb and an 84% audience score on Rotten Tomatoes. For each show's three-day post-debut window, "House of the Dragon" attracted 51% more viewers than "Rings of Power," according to Whip Media data reported by TheWrap. The publication also looked at data from Samba TV, which tracks viewership through connected TVs in the US. That told a similar story: 3.1 million households watched the first two episodes of "Rings of Fire" in the first three days, while 4.8 million watched the HBO premier in the same window.

Counterintuitively, The Lord of the Rings' rabid fan base, including those obsessed with J.R.R. Tolkien's original books, may be to blame for Amazon's challenges.

"It will be impossible for Amazon to please the millions of Tolkien fans, despite the enormous budget for the series," Tom Forte, an analyst for investment firm D.A. Davidson wrote in a recent note titled "Jar Jar Binks Ruined My Adulthood" that drew comparisons between "The Rings of Power" and "Star Wars" fans' outrage over the 1999 movie "The Phantom Menace."

"There is bound to be a character, plot, subplot, line etc. in the series that will upset/disappoint many passionate fans and there is, even, a risk that the series itself will prove disappointing," Forte continued.

Amazon Prime Video disabled viewers' ability to review the TV show

Low ratings from viewers signals a "greater than zero" risk that some Prime members could cancel their subscriptions, Forte said in an interview Tuesday. Part of Amazon's strategy with big budget streaming video content is to entice more people to subscribe to Prime because they often end up buying many other products and services from the company.

On its own Prime Video platform, Amazon disabled viewers' ability to review "The Rings of Power," to protect the series from an onslaught of incendiary reviews, including some castigating Amazon's decision to cast actors of color in the fantasy series.

"Even if it was well-meaning, turning off reviews was a bad look," Forte said. "That's only going to make things appear worse."

By September 9, Amazon finally allowed reviews, presumably after weeding out racist trolls and bots. The ratings averaged 3.5 stars out of 5, with more than 1,000 reviews as of late Friday evening.

On other review sites, people leaving negative reviews said "The Rings of Power" was a break from the spirit of Tolkien's work.

"Cover your eyes, lest this morgul filth of a show taint your love of Tolkien," one Rotten Tomatoes reviewer, who gave the series half a star, wrote. "The story is NOT TOLKIEN - If you are a Tolkien Fan - you will not like this," another half-star reviewer wrote.

One hardcore Tolkien fan echoed those comments on Twitter: "Tolkien is turning in his grave," Tesla CEO Elon Musk wrote.

Still, other analysts said it was highly unlikely that Prime members would cancel over disappointment with a single TV show. Prime subscribers rarely cancel, AB Bernstein analyst Mark Shmulik noted.

"It's too early to judge whether this is going to be a success or a failure," Shmulik said. More important than the reviews of the first two episodes are how audiences respond to subsequent episodes, he said. "What's the ability to keep excitement up? What's the rate of viewership decline for the next episodes? Those are important metrics to measure."

Indeed, it's likely that audience scores for the series will improve in coming weeks as people who are less-invested in Tolkien's epic watch the series, Forte predicted.

"It has to succeed. There's no option."

Amazon has said the release of "The Rings of Power" last week was the company's "biggest premiere ever." More than 25 million people watched the series the day it dropped, Amazon said in a press release last week, compared to 10.2 million people who watched HBO's "Game of Thrones" spinoff, "House of the Dragon."

The series' viewership looks smaller, though, compared to the 200 million Prime members who stream videos and TV shows. That raises questions about how worthwhile the series is for the nearly 88% of Amazon Prime members who didn't watch the premiere – but who are paying an extra $20 a year in part to recoup the huge cost of making the series, as well as an annual $1 billion price tag for the streaming rights to Thursday Night Football.

Amazon executives will be closely watching what percentage of all Prime Video streams the project represents and how many inactive Prime accounts logged on to watch "The Rings of Power," Insider previously reported.

An Amazon spokesperson did not respond to questions about how many Prime subscribers have watched "The Rings of Power" since its release last week.

Amazon insiders, meanwhile, have said the future of Amazon Studios hinges on "The Rings of Power" being a success.

"If it doesn't succeed, there's going to be a big question from Andy Jassy and the board," one former senior Amazon Studios exec previously told Insider. "If we can't take this piece of IP and make it successful, why is Amazon Studios even here?"

"It has to succeed," this person added. "There's no option."

Do you work at Amazon? Contact reporter Katherine Long via encrypted messaging apps Signal/Telegram (+1-206-375-9280) or email (klong@businessinsider.com). Check out Insider's source guide for other tips on sharing information securely.