Amazon's planning to "significantly" increase its spending in video content as it gets more serious about taking on Netflix in the online video-streaming space.
During its earnings call with the press on Thursday, Amazon CFO Brian Olsavsky stressed that the company's seeing better engagement and conversions from Prime members who use the video service, and that a lot of future investments will focus on boosting video offerings.
"One of the larger investments is our content spend ... We like the results because we see better engagements, better free trial conversions from Prime members who use the video service," Olsavsky said. "We're going to significantly increase our content spend, some of it is in Q2 guidance, but we'll be expecting more of it in the backend of the year certainly."
Online video has been a major investment area for Amazon lately. Its original TV series "Transparent" and "Mozart in the Jungle" have won Golden Globe awards recently, while the e-commerce business was the biggest spender at this year's Sundance Film Festival.
And earlier this month, in a clear sign that Amazon's going after Netflix, the online-retail giant made its video service available to non-Prime members, launching a standalone video service that can be purchased month by month. Until then, Amazon's video content was available only to Prime members, its $99 annual membership program that gives access to two-day free shipping and a bunch of video and music, as well as cloud-storage space.
Amazon's likely going to invest in its original programming, a space where it's known to lag behind Netflix and HBO. As this chart from Morgan Stanley shows, most people believe that Netflix and HBO have better original content than Amazon:
