Over the past two years, all the primary streaming services have reexamined the amounts they are spending to acquire and create content for their platforms. After this review, top providers including Netflix, Disney, and Warner Bros. Discovery have cut their spending significantly in order to create an attractive balance sheet.
Amazon was considered an outlier, insulated from this scrutiny by its exceptional corporate revenues and profits. However, even Amazon is taking a closer look at its spending on content, with CEO Andy Jassy asking for a “detailed budget analysis” of Amazon Studios.
Amazon’s approach has been to spend big for series that would attract consumers to sign up for Amazon Prime membership, at the rate of $139/year. Two notable examples are $250M spent on the first season of CITADEL and $400M on THE LORD OF THE RINGS: THE RINGS OF POWER, making it the most expensive television ever produced.
According to Bloomberg, returns on these investments have been underwhelming for Amazon, with data showing that most viewers of the first episode of RINGS did not end up finishing the series and CITADEL failed to break into the top 10 most-watched streaming series. Even a company with the resources of Amazon is starting to feel the heat and rationalize the investments it is making in content.