Amazon Scrutinizes Spending in Studio Unit

(Photo credit: Nathan DeFiesta/Unsplash)
Photo by Nathan DeFiesta via Unsplash

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You can expect fewer TV shows with sweeping panoramic vistas and all-star casts.

Amazon CEO Andy Jassy has asked execs at the company’s studio division to provide granular budget breakdowns for its biggest shows, Bloomberg reported on Wednesday. This comes amid a general cooling-off in the streaming industry, as the golden age of seemingly endless content (some good, some… less good) arrives at its inevitable sunset.

The Rings of Purchasing Power

Amazon Studios has taken some big swings in recent months, and they haven’t necessarily paid off. Its attempt at a sweeping Lord of the Rings fantasy epic, The Rings of Power, cost a cool $715 million according to The Wall Street Journal, $250 million of which was just to buy the rights to J. R. R. Tolkien’s story. Unfortunately, it seems the Tolkien connection didn’t guarantee a baked-in audience, as company sources told The Hollywood Reporter in April that less than 50% of viewers watched the series all the way through.

Now it seems Jassy wants to look at the books, unsurprising given he has enacted sweeping cuts across Amazon, including 27,000 job cuts so far this year. But Amazon isn’t the only company suffering from prolonged and engorged spending on its streaming offerings:

  • Traditional media companies with streaming platforms including Disney, Warner Bros., and Comcast have reported a combined $20 billion in losses on their streaming businesses since 2020, the WSJ reported on Wednesday.
  • Like the wider tech industry, investors are now keener to see profitability than growth. Add into that the ongoing writers strike upending productions in progress, and you have a recipe or some very reticent commissions for new projects.

Mission Anti-Repetition: Netflix is managing to eke out a profit unlike many of its legacy-media competitors, but it’s also trying to plump up its profit margins. Its recent crackdown on password-sharing enjoyed some mild success, and on Monday the Financial Times reported that the company is looking to spruce up its advertising offerings — less than a year after it launched its ad-supported subscription tier. The FT reported Netflix execs are touting a new “episodic” approach to ads. Translation: they’ll make sure that when you binge 30 episodes of Seinfeld in a row, you won’t see the same ad over and over again. And another thing, you won’t get shown the same ad over and over again. And another thing…