That's up from $1.5 billion in Q1 of 2018. Not accounting for seasonal fluctuations, this would mean that Amazon may spend around $7 billion on content this year. The company said in its 10-Q filing, which details earnings and expenses for the quarter, that it had a total of $1.7 billion of music and video expenses during the quarter.
"Total video and music expense includes licensing and production costs associated with content offered within Amazon Prime memberships, and costs associated with digital subscriptions and sold or rented content," the company declared in its filing. That's in part because unlike Netflix, Amazon did include licensing costs for music in the disclosure. And Amazon didn't stop there.
It also shows that Amazon is still spending a lot less than Netflix, which is expected to invest as much as $15 billion in original and licensed content this year. However, it does not tell us how much Amazon is really investing in video for Prime subscribers.” />
However, there's a significant catch: As disclosed on Friday, Amazon's content costs still tell us very little about how much the company is investing in the production of movies and TV shows.
Analysts and industry watchers have been eagerly awaiting more detailed disclosures to see how Amazon's spending is matching up to the money Netflix is shelling out on original content. The company has not broken out these content costs in past quarters, and instead included them in its cost of sales.
Among analysts and journalists covering the company, Amazon is infamous for releasing data points that don't tell us much at all, with executives regularly boosting percentage growth stats without referring to absolute numbers. Friday's release goes a bit further, and does offer some concrete evidence that the company's content business is big, and growing.
What's more, any of the money Amazon hands to publishers like HBO, Showtime or Starz for reselling their subscription services as part of Amazon Channels, was likely included as well. In other words: Any digital video that Amazon rented or sold to its customers, whether they are Prime subscribers or not, was also part of the Q1 content cost total. The same goes for any paid MP3 download.
Amazon revealed in a regulatory filing Friday afternoon how much money it spent on content in the first quarter of the year — but the disclosure still doesn't tell us a whole lot about how much the company is investing in producing originals for its Prime Video service.