Amazon Prime Video is making a shift with new approaches and an altered focus on content and streaming options. The platform will feature more sports coverage in comparison to their original movies and shows.
- Amazon Prime Video is redirecting efforts towards live sports, moving away from original TV and movies.
- CEO Andy Jassy aims to make Prime Video profitable by the end of 2025, partially through ad revenue during real-time viewership.
- Approximately $3 billion is invested annually for rights in live sports including the NBA and NFL.
- In 2024 Amazon spent roughly $7 billion on their original and licensed content.
- New partnerships have formed to showcase games while new ways to advertise within shows will become a larger focus on the platform.
Strategic Shift Towards Live Sports
Amazon is changing their approach and has decided to now highlight live sports programming for Prime Video instead of relying primarily on original TV shows and films. This change in focus to live sports is meant to be a method for increasing profits with the intention of becoming profitable by the end of 2025.
Investment in Sports Content
The platform is committing to large sums with about $3 Billion invested yearly to get broadcasting rights for major leagues such as the NBA and the NFL. These high profile events are the driving force behind ad placements to create a greater flow of revenue.
Monetizing Real-Time Viewership
By making live sports content their priority Amazon hopes to achieve higher engagement while using advertising placement in the moment with their viewership. CEO Andy Jassy aims to balance content spending while having higher earnings and profits.
Targeted Advertising
The live nature of sporting events gives opportunities for direct advertising which will be seen as valuable revenue. Real-time viewership along with specific audiences creates an opportune environment for ads that appeal to all watching.
Reduced Commissioning of Original Content
As a major adjustment Amazon will also reduce the amount of commissioning for new movie and show projects which will shift spending to another source. This comes after a 2022 planning meeting with a complete different vision to their approach in original production. They are taking a new risk as the demand may be more suited to live shows over long form dramas and movies.
Content Budget in 2024
It is worth noting that Amazon had an annual content budget of $7 Billion that covered original and licensed content and their investments in sports. A big shift from content production to the realm of sports can signal new change within the platform's long-term vision.
New Partnerships and Agreements
With Amazon partnering with Disney and Comcast securing an 11 year $77 billion deal to have access to broadcast rights of the NBA gives opportunity to capture audience viewership. This highlights more movement in major alliances to have streaming dominate sports over standard linear television .
Revenue and Growth Strategy
With partnerships forming they may become less focused on creation of original pieces of work as this is a demonstration of wanting guaranteed revenue with each partnership being an investment in the platforms financial journey. It seems that this direction comes in response to seeing new markets where viewing is a higher priority, specifically on live broadcasts of sporting events.
Competing with the Streaming Giants
This pivot to prioritize sports and targeted ads allows Amazon to position itself within streaming options as they create their own style of content offerings in competition with larger names such as Netflix. The new advertising model that they created caused all to question standard pricing practices by also prompting change in rivals ad price.
What This Means for Viewers and Content
Viewers may begin to see fewer in house movies and shows in the long term as their programming switches directions. Sports could be in place as some viewers who may not use that aspect would see that programming a part of what they receive with a subscription which opens up to a potentially new audience. The viewing options however are very specific to what you may prefer to consume, with a different selection available compared to just a few years prior.
Global View of Sports Streaming
Amazon’s push into sport also falls into step with other global players that want to dominate the market as the need for on-demand live viewing is becoming a central area of focus with new ventures by competitors. Streaming has completely upended what television and movies were for the previous century making each direction uncharted and open to new types of viewership and market growth.
Key Takeaways
- Amazon is now redirecting efforts into live sports.
- Amazon has allocated $3 billion for annual investment into sports broadcast rights.
- This new strategy is done in order for Amazon to gain profitability in streaming.
- This approach will come by decreasing the creation of original TV shows and movies in the near future.
- Amazon has sought out major sports leagues to partner with in new deals for growth and revenue.