Wednesday, July 6

Amazon’s spend on TV and film in UK passes £1bn as Netflix cuts back | Amazon Prime Video


Amazon has invested more than £1bn on TV, movie and live sport content in the UK in recent years and plans to increase spending to make it a must-have streaming service for cash-strapped households.

It is the first time that Amazon has revealed the level of investment in Prime Video in the UK, spanning the period since 2018, as competition for viewers intensifies amid a mounting cost of living crisis.

While Amazon’s annual UK budget lags that of the $1bn (£810m) spent by Netflix on hits from Bridgerton to Sex Education, it continues to rapidly grow – with big releases in the pipeline such as the Lord of the Rings series – while its rival is in the process of cutting budgets and staff after reporting its first fall in subscribers in a decade.

“Our investments are ramping year over year, said Chris Bird, managing director of Prime Video UK, ahead of the unveiling of a major slate of new programming at an event in central London on Thursday. “Over the last five years we have crossed the £1bn mark, that feels like a milestone to recognize our growth here. We are fully committed to our future in the UK, as we are across Europe and the world.”

Amazon has doubled down on its commitment to the UK signing a record-breaking long lease deal for its first permanent studio space in the UK at Shepperton Studios, where Netflix also has a deal, and making the surprise decision to move shooting of the mega- budget Lord of the Rings TV series from New Zealand to the UK.

New Zealand’s minister for economic development and tourism, Stuart Nash, said that the first series in the saga, called The Rings of Power, which will premiere later this year, cost about NZ$650m (£332m) to make.

Bird acknowledged that the streaming market is not immune to the cost of living crisis, but maintained that Prime Video has achieved the status of a “must have” service alongside Netflix.

“We are expecting a challenging time [for households] ahead,” he said. “Inflation is rising, the cost of living is soaring and we don’t expect the same level of video engagement from customers as we had seen through the pandemic period. But that is not dampening investment at all. We are not expecting a dramatic slowdown. We are still seeing growth in our business and customers are pleased and excited.”

At the end of the first quarter Netflix had 222m global subscribers, Prime Video 152m and Disney+ 138m. In the UK, Netflix remains the market leader with an estimated 14m subscribers, followed by Prime Video on 11.9m and Disney+ at 4.8m, according to Ampere Analysis.

“We expect customers will be more savvy in their purchase choices,” he said. “It’s been about multiple subscriptions in the past, but with the challenges of the cost of living perhaps that reduces.”

As well as its own subscription video-on-demand service Amazon has an advertising-funded free service called Freevee, which was rebranded from IMDB TV last month, and 100,000 titles to buy or rent as well as offering subscriptions to partner video channels such as reality TV streamer Hayu.

Netflix has said that it is to launch an ad-funded subscription tier later this year to attempt to reignite growth.

“We are a different service,” said Bird, who worked at British streaming site LoveFilm, which was bought by Amazon in a £200m deal in 2011 to spur its ambitions to take on Netflix in the UK. “Our catalogue, whilst perhaps smaller in volume than other services, is very well crafted and specific in our goal to be seen as high quality.”

While US streamers including Amazon, Netflix and Disney continue to inject an increasing amount of money into British-made shows and films, the biggest spenders in the UK remain traditional national broadcasters.

The BBC’s total annual content budget across TV, radio and online is about £2.3bn, with spend on TV content about £1.6bn of this. ITV spends about £1.1bn annually on content for its portfolio of channels, while Channel 4’s £700m budget is about the same as Netflix.

Last year, a record £5.6bn was spent making blockbusters such as Mission: Impossible 7 and big-budget dramas including Bridgerton in the UK.

It was double the level of investment in 2020, when the spread of coronavirus shut down the production industry for months on end, and almost £1.3bn more than the previous record set in pre-pandemic 2019.


www.theguardian.com

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