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Is Amazon Wasting Money on Prime Video?
Another division that seems deserving of more scrutiny is Prime Video, which Amazon doesn't directly account for on its financial statements. With the exception of a la carte spending on streaming rentals and sales, Amazon doesn't directly monetize Prime Video, using it instead as a perk to attract Prime members.
Prime-o-nomics
Amazon charges different prices for Prime around the world, but if you assume every one of those members paid $139 a year, that would bring in $27.8 billion in annual membership fees. That's close to the $34.1 billion it brought in with subscriber fees over the last four quarters, which comes from Prime and other subscription businesses like Kindle Unlimited, Audible, and Amazon Music.
That line of thinking also explains why the company is shelling out $1 billion annually on Thursday Night Football, which it said led to a record number of Prime sign-ups in a three-hour period.
The competitive dynamics in streaming, in other words, are undergoing a correction. Too many companies have entered the field, and they're not charging subscribers enough to offset the costs of content.
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