Amazon renews content investment pledge

Tom Szkutak

Amazon will continue investing in original content for its Prime Instant Video service after billing roughly US$100 million on originals in the third quarter, according to chief financial officer Tom Szkutak. 

Speaking on Amazon’s Q3 earnings call, Szkutak said that video was a key driver to convince customers on free Amazon Prime trials to sign up to the service –which also includes cut-price shipping on physical products.

“We continue to invest heavily in video content, including originals. There is a number of different metrics we’re looking at from a Prime standpoint, but what we’re seeing so far are those customers who are streaming are renewing at considerably higher rates,” said Szkutak.

“When those new prime members become prime members, the other thing we’re seeing is they’re buying physical product, which is a great impact for us,” he added.

In its earnings, Amazon said that since the debut of its original 10-episode series Transparent in the US, UK and Germany, it is “the number one ranked TV series on Prime Instant Video,” with strong ratings on Rotten Tomatoes and Metacritic.

Amazon will premiere all 10 episodes of the second season of its political comedy series Alpha House exclusively on Prime Instant Video starting this week, and said that two more original pilots – dramatic thriller Hand of God and coming-of-age comedy Red Oaks – will return for full seasons.

Overall in the quarter, Amazon reported a 20% year-on-year increase in net sales to US$20.58 billion. However, its net loss was US$437 million compared to a net loss of $41 million in the third quarter of 2013.

Amazon first announced in July that it was planning “significant growth” in its original content spend, increasing its investment in Prime Instant Video productions to more than US$100 million (€75 million) in Q3.