Amazon‘s video platform grew significantly in 2014, but that growth came at a big price. In the company’s Q4 2014 earnings announcement, founder and CEO Jeff Bezos revealed that Amazon spent $1.3 billion on video over the past 12 months.
2014 was a particularly big year for Amazon’s original programs, with offerings like Transparent and Mozart in the Jungle debuting to strong reviews. Even so, Amazon spent the bulk of its ten-digit video budget on the deals that license TV shows and films to its library. While we don’t know the exact amount Amazon spent on the programs its distributes, its originals budget for Q3 2014 hovered around $100 million. If we crudely extrapolate that figure for the whole year, it comes out to $400 million, which is still less than one-third of the company’s total yearly video spend.
$1.3 billion is an eye-popping number, but it is still a small sum when compared to Netflix. Amazon’s chief rival in the video on demand industry spent a whopping $3.8 billion on video–three times as much as Amazon. That number is also an $800 million increase over Netflix’ 2013 total.
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Amazon’s big investment in video helped drive a lot of new customers to its $99-per-year Prime service. While Bezos didn’t reveal how many Prime subscribers Amazon has, he did note an increase in the service’s membership. “Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid,” he said in a statement. “In 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We’ll continue to work hard for our Prime members.”
If these video spend totals seem astronomical, just wait until the end of 2015. According to analyst David Bank from RBC Capital Markets, Netflix, Hulu, and Amazon will combine to spend $6.8 billion on video in 2015.
