Netflix has been the undisputed queen of the global-video-streaming-market ball for years now, with only a few forays into the space from the likes of companies like Hulu and HBO. Times are changing, and so could the leader of the global-video market, as Amazon Prime enters the foray with deeper pockets than even Netflix–significantly deeper pockets…$18 billion cash on hand deep pockets. Not only that, but Amazon is using those deep pockets to aggressively bid on popular shows and movie rights, while Netflix is investing in original content.
This international launch is a clear attempt by Amazon to keep their Prime video services competitive with Netflix, as the red giant significantly expanded its international reach last January to over 190 countries. Amazon has been scrambling to catch up throughout 2016 and seems ready to finally make their large-scale international debut.
One of the Amazon’s flagship pieces of content, The Grand Tour, which has an incredible amount of international popularity, provided the most recent hint towards Amazon’s global expansion as it was announced the Amazon-original program would be available in more than 200 countries. To put that in context, Amazon Prime programming is currently only available in the U.S., U.K., Germany, Austria and Japan.
While an international presence is critical for both Netflix and Amazon’s success, the two video-streaming giants are taking very different approaches to building their catalogue of content. Only time will tell us which approach was the right one.
Netflix, has taken a marked shift in their approach to content with a renewed focus in 2016 on creating original content. This is only expected to increase in the coming year as Netflix is expected to invest upwards of $6 billion in creating over 1,200 hours of original content in the coming year. Netflix has been using it’s shared to finance these investments, but with a negative cashflow of $500 million in 2015 many worry about the future of the company if that stock drops.
Amazon on the other hand, has been aggressively bidding on movie rights, tv shows and other content in an effort to beef up its Prime offerings for some time now. Given Amazon’s current $380 billion market value, they have the resources to continue acquiring the rights to popular content indefinitely. The Grand Tour is just the beginning.
Amazon Prime going international is a great thing for consumers, but as the race between Amazon and Netflix continues into international waters Netflix may find itself looking for investors with deeper pockets. Apple and Disney have both been rumored to have an interest in buying Netflix, but with its current market value of $50 billion that’s a very expensive investment–especially if Amazon continues to proactively take over the space.