Amazon Content Spending Rose 14% in 2023 to Nearly $19 Billion

While other media companies have been paring back content spending, Amazon shelled out more than $2 billion more in 2023 for TV shows, movies and music than it did a year earlier.

Amazon’s total video and music expense last year was $18.9 billion, representing a 14% increase from $16.6 billion in 2022, according to the company’s 10-K annual report filed Friday. The figures include licensing and production costs associated with content offered in Amazon Prime memberships, and costs associated with digital subscriptions and sold or rented content. Amazon’s bigger outlay for content came even amid Hollywood’s twin WGA and SAG-AFTRA protracted strikes last year that halted most TV and movie productions for months.

More from Variety

With $18.9 billion in content costs in 2023, Amazon is a bigger content buyer than Netflix — although unlike Netflix, Amazon spends a big chunk of change on music licensing in addition to TV and movies. For 2023, Netflix reported $12.6 billion in cash spending on content (down from a previously anticipated $17 billion, largely because of the strikes) and is targeting $17 billion for 2024.

On Amazon’s Q4 earnings call Thursday, CEO Andy Jassy reiterated the company’s belief that Prime Video, included as part of the Prime membership program, is on track to be a sizable — and profitable — business in its own right.

“We have increasing conviction that Prime Video can be a large and profitable business on its own, and we’ll continue to invest in compelling exclusive content for Prime members like ‘Thursday Night Football,’ ‘Lord of the Rings,’ ‘Reacher,’ ‘Mr. & Mr. Smith,’ ‘Citadel’ and more,” Jassy said.

Jassy added that with the introduction of ads by default in Prime Video, which launched Jan. 29, “we’ll be able to continue investing meaningfully in content over time.” This week Amazon began running ads in Prime Video content in major markets unless users opt to pay extra ($2.99/month in the U.S.) to have an ad-free experience. Some analysts forecast Prime Video ads generating more than $3 billion in incremental revenue in 2024.

Amazon’s content budget includes a hefty check to the NFL for exclusive streaming rights to a package of “Thursday Night Football” games. Under the 11-year deal, Amazon is estimated to be paying about $1 billion per year to the league. On the call, Jassy touted Prime Video’s second season of “TNF” as “a rousing success by all accounts” and noted that overall viewers increased 24% year over year.

The weighted average remaining life of Amazon’s capitalized video content is 3.5 years, according to the company’s 10-K. “We review usage and viewing patterns impacting the amortization of capitalized video content on an ongoing basis and reflect any changes prospectively,” Amazon said. Produced and licensed video content is primarily monetized together as a unit, referred to as a film group, in each major geography where Amazon Prime memberships are available. The company’s total capitalized costs of video and music as of Dec. 31, 2023, were $17.4 billion (versus $16.7 billion the year prior).

Amazon topped Wall Street expectations for the fourth quarter of 2023, reporting ad revenue of $14.7 billion for the period — up 27%.

Last month, Amazon laid off hundreds of employees across Amazon MGM Studios, Prime Video, Twitch and Audible. That came after the tech giant had pink-slipped more than 27,000 workers since the end of 2022.

Pictured above: Alan Ritchson in Amazon Prime Video’s action series “Reacher” based on Lee Child’s book series

VIP+ Analysis: Content Spending Forecast for Media & Tech

Best of Variety

Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.