Amazon Shifts Prime Video Strategy to Prioritize Live Sports Over Original Content.

Amazon Prime Video to prioritize live sports over original content to meet profit targets and generate revenue through targeted ad placements. The company has invested heavily in sports content, spending $3 billion annually for broadcasting rights to major leagues like the NBA and NFL. Amazon has also secured deals for exclusive sports content and began placing ads within its Prime Video platform last year. The company's entertainment team has been commissioning fewer film and TV projects. Analysts have a Strong Buy consensus rating on AMZN stock with a 7.1% upside potential.

Amazon Prime Video, the streaming giant's premium content platform, is reportedly shifting its strategic focus towards live sports, moving away from its traditional emphasis on original television shows and movies [1]. This change in direction is aimed at meeting internal corporate profit targets and generating additional revenue through targeted ad placements [1].

Live sports events offer a unique opportunity for streaming platforms to capitalize on real-time viewership. The real-time nature of live sports makes them an attractive proposition for targeted advertising, leading streaming companies to secure more live content deals to boost ad revenues [1]. Amazon's investment in sports content has been substantial, with an estimated annual spend of around $3 billion on broadcasting rights for major leagues like the NBA and NFL [1].

Amazon's recent acquisition of the rights to carry NBA games in an 11-year deal valued at $77 billion is a testament to the company's commitment to live sports [1]. The streaming giant also began placing ads within its Prime Video platform last year [1]. Amazon's biggest rival, Netflix, has also made a significant push into live sports, securing deals for Christmas Day NFL games, a high-profile boxing match between Jake Paul and Mike Tyson, and live WWE RAW events [1].

After a 2022 planning meeting, Amazon's entertainment team reportedly commissioned fewer film and TV projects [1]. For 2024, Amazon's annual budget for original and licensed movies, TV shows, and live sports was around $7 billion [1].

This shift towards live sports is not surprising, given Amazon CEO Andy Jassy's goal of making Prime Video profitable by the end of 2025 [1]. By prioritizing live sports, Amazon aims to capitalize on the unique opportunities they present for generating revenue and achieving profitability.

References:
[1] The Information. (2023, January 24). Amazon Prime Video shifts focus to live sports to boost profits, The Information reports. Retrieved from https://money.usnews.com/investing/news/articles/2025-01-24/amazon-prime-video-shifts-focus-to-live-sports-to-boost-profits-the-information-reports
[2] MarketScreener. (2023, January 24). Amazon Prime Video shifts focus to live sports to boost profits, The Information reports. Retrieved from https://www.marketscreener.com/quote/stock/AMAZON-COM-INC-12864605/news/Amazon-Prime-Video-shifts-focus-to-live-sports-to-boost-profits-The-Information-reports-48866383/