The online retailer is ramping up spending on shows, but it's hard to evaluate if the investment is working. Havovi Cooper reports.
As Amazon expands its reach into every aspect of retail--everything from e-books to groceries and clothing--one of its biggest expense items has little to do with shopping. Sources telling Reuters that video-- is now Amazon's second biggest consumer expense, after shipping. Reuters Correspondent Jeffrey Dastin in San Francisco explains SOUNDBITE: JEFFREY DASTIN, CORRESPONDENT, REUTERS, (ENGLISH) SAYING: "Amazon sees video as a key way to get people to sign up for its Prime shopping club. Not only do you get fast shipping but you also get to stream movies and TV, in some cases only available on Amazon. And the company said it tracks very closely when people are on a free trial of prime, are they more likely to sign up for the $99 a year version if they are watching video or if they're not, the answer is that video helps dramatically with converting those customers so therefore it's a worthy investment." Analysts estimate Amazon's spending on content will have tripled since 2014 to at least $4.5 billion this year.. Some of Amazons most expensive video plays include a $10 million deal to score the distribution rights in North America to its Oscar-winning "Manchester By the Sea" And it dished out around $50 million to stream 10 Thursday-night games for the NFL this year, five times what Twitter had paid for the same rights But the company is giving few details about how those huge investments in video are paying off. Despite any concrete numbers--shareholders are giving Amazon a pass when it comes to splurging the big bucks on video --partly due to its apparent success among critics: It has won Golden Globes for its original television shows, and this year it took home three Academy Awards - a first for a streaming service