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Amazon to invest $100 million for producing original video content on Prime

Flickr user: https://goo.gl/tVKm1T

Flickr user: https://goo.gl/tVKm1T

Amazon has said that it will invest more than $100 million in the third quarter to produce original content for its subscription service Prime which allows users to stream movies, TV shows & music, and store photos.

“A lot of you have probably seen a lot of the announcements that we’ve green-lighted a number of pilots. We’re going to be in heavy production in those series that have been green-lit during Q3. We’ve also announced a number of pilots that will be in production on. And so that original content, it’s a portion of our total content, will be over $100 million in Q3,” Amazon chief financial officer, Tom Szkutak told analysts in a conference call.

Szkutak said that the company added more Prime subscribers in Q2 of this year than in Q2 of last year, but however declined to give further numbers on their subscribers. Memberships for Amazon Prime grew 53% year-on-year (YoY) in Q4 2014 globally Szkutak had said during the Q4 2014 earnings conference call.

In January, Amazon India said it will offer music and video streaming services later this year and it was also reported that it had hired former Multi Screen Media executive Nitesh Kripalani to head its digital content business. Kripalani was instrumental in developing  Sony Liv and Liv Sports.

A number of Indian video streaming applications have also started to invest in producing original content for digital over the last few weeks. Some of them:

–  Eros International will produce three original shows which will be streamed on its video on demand platform Eros Now.

– Internet media company The Viral Fever has launched a new streaming platform called TVFPlay which features the company’s web-series and shows. The company used the new platform to launch its new web-series called Pitchers which focuses on the startup world. Interestingly, at the end of the trailer, TVF says that it will air its episodes of the new show first on the new platform and will upload the same on YouTube a week later.

In May, YouTube multi-channel network #fame (earlier Famebox Networks) launched alive video streaming app. This app will allow artists/talents to live stream their performances to viewers. The app is currently available for both Android and iOS.

– In June, Mobile value-added services company Digivive signed a content deal with CA Media Digital’s celebrity digital network, Fluence, to create celebrity-led mobile series on its application, NexGTv. The content deal will have Fluence create and produce original content for nexGTv.

Investment in India: Amazon CEO Jeff Bezos said that the company continued to double down on its fastest growing geography, India. Amazon.in introduced Sunday delivery across 100 cities in India for all FBA products at no additional cost. The company said that India continues to be its fastest growing geography in terms of sales with more than 25 million products on its online store.

Amazon Financials

Amazon reported net sales of $23.18 billion during Q2 2015, up 20% from $19.34 billion in Q2 2014. However, net profit was up and stood at $92 million in this quarter, compared to loss of $126 million in Q2 2014.

AWS, the company’s cloud computing arm, had sales of $1.82 billion, a growth of 81 percent when compared to the same quarter last year.

Amazon’s media business revenues in North America was for Q2 2015 stood at $2.62 billion, marginally up by 6.33% from $2.64 billion in Q2 2014. Revenues from other international regions for the media business stood at $2.09 billion down 12.01% from $2.38 billion from the same period last year. The media business includes books, music, movies, video games and consoles, software, and digital downloads.

Revenues from electronics & other merchandize business for the quarter stood at $10.98 billion in the North America region up 31.33% from $8.37 billion from the same quarter last year. For other international areas, the segment reported $5.43 billion, up 10.44% from $4.91 billion in the same period last year.

Note, Amazon changed their reportable segments to report North America, international and Amazon Web Services.

Developments in India

– Amazon.com will be extending its business loan programme to small sellers in India and seven other countries later this year. The Amazon Lending programme, which provides short-term working capital for sellers to expand their business, is on an invite basis only and not open to all sellers. The other countries where this programme will be extended to are Canada, China, France, Germany, Italy, Spain and the United Kingdom.

– Amazon.in launched its global selling program  to enable Indian sellers and manufacturers to sell internationally on its platform.

-Amazon India launched advertising solutions for its website, allowing third party sellers to promote their products to consumers.

Download: Press release | Presentation | Conference Call

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