In a strategic pivot, Amazon.com Inc. AMZN is redirecting its Prime Video efforts towards live sports content, a move aimed at achieving profitability by the end of 2025.
What Happened: Amazon.com is pivoting its Prime Video strategy towards live sports, moving away from original TV shows and movies, according to a report by The Information. This strategic shift is aimed at meeting internal profit targets by the end of 2025.
According to the report, Amazon is investing approximately $3 billion annually in sports content, including broadcasting rights for major leagues like the NBA and NFL. This move is part of CEO Andy Jassy’s plan to make Prime Video profitable.
The focus on live sports is driven by the potential for targeted advertising opportunities during real-time viewership.
In July, Amazon, alongside Walt Disney Co. and Comcast Corp., secured an 11-year deal valued at $77 billion to broadcast NBA games. The company has also started integrating ads within its Prime Video platform to enhance revenue streams.
The report highlights that after a 2022 planning meeting, Amazon’s entertainment team has reduced the commissioning of new film and TV projects. For 2024, the company’s budget for original and licensed content, including live sports was around $7 billion.
Why It Matters: This shift towards live sports is part of Amazon’s broader strategy to capitalize on the lucrative sports market. In August 2024, Amazon signed a $100 million deal with the Kelce brothers for their popular sports podcast, further embedding itself in the NFL ecosystem.
This aligns with CEO Andy Jassy’s vision to keep advertising minimal compared to competitors like Netflix and YouTube, as noted in an August statement.
Additionally, Amazon’s introduction of an ad-supported version of Prime Video has disrupted the streaming ad market, compelling rivals like Netflix to adjust their ad pricing strategies, as reported in June 2024. This strategic focus on live sports and innovative advertising models is part of Amazon’s efforts to enhance its competitive edge and profitability in the streaming industry.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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