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Amazon ups content spend with eyes on global market

Amazon Prime Instant VideoAmazon is nearly doubling its spend on video content and associated marketing in this half of the year, compared to the first, and has its sights set on the global market.

Speaking on the company’s third quarter earnings call, Amazon’s chief finance officer Brian Olsavsky described a “step up” in investment in digital content, fulfilment centres and other areas like Echo and voice service Alexa, Amazon’s Indian expansion and Amazon Web Services.

On the call, Olsavsky was asked specifically whether an increase in Prime Video spend meant Amazon will also be stepping up its international expansion and whether there is the potential that Prime Video will be stripped from Prime to allow it to be extended into other countries.

He replied by saying that: “The content that we are creating, especially through Amazon Studios, we are generally holding the worldwide rights to and can use that in other countries as well and the cost of that then gets amortised to those countries.”

“We consider that to be very valuable as opposed to, versus licensing many times by country, the third-party rights to content that we don’t create ourselves.”

Amazon Prime Video is currently available in the US, UK, Germany and Japan. Olsavsky said it will come to India “soon” and described the company’s push into India as “by far the biggest individual thing” that Amazon is investing in internationally.

Among the highlights it pointed out for the quarter, Amazon cited Amazon Studio’s slate of new original movies and series that will premiere in the coming months – which include season two of The Man in the High Castle, car show The Grand Tour, and the third season of Mozart in the Jungle.

Amazon also said that its customers have streamed “billions of minutes of content” from providers that have self-published through Amazon Video Direct since its launch in May.

For the quarter Amazon reported a 29% increase in net sales to US$32.7 billion (€30 billion). Operating income was US$575 million, compared with US$406 million in Q3 2015.

Net income was $252 million in the third quarter, or $0.52 per diluted share, compared with US$79 million, or US$0.17 per diluted share, in third quarter 2015. However, this missed analyst estimates of US$0.78 per share.

Amazon is yet to announce further Prime Video launches, but in August said it is hiring a London-based head of original content to respond to its growing interest in video entertainment commissioned outside of the US.

Speaking at the Edinburgh International Television Festival, Amazon Studios director Roy Price said that Amazon planned to “double down” and “grow a team in London”.

Amazon Video is also planning to launch its streaming partners programme in Europe for the first time, according to details revealed in a string of company job posts earlier this year.