Amazon (NASDAQ:AMZN) will spend over $2.5B on streaming license rights and original content next year, up from $1.5B-$2B in 2014, estimates Bernstein. The company's 2015 revenue consensus is at $109.2B.
Bernstein also reports a survey of 400 Prime subs found 60% of them used Prime Instant Video, and that 13% of those who signed up for Prime in the last year did so to get Instant Video (only 6% of older sign-ups did so).
At those rates, the firm thinks Amazon will need to add 10M-20M additional Prime subs, on top of an estimated base of 42M, to justify its investment.
Though unwilling to share details about its content spend (as with so many other things), several of Amazon's streaming deals have been reported to carry steep prices. Its HBO deal reportedly costs $300M+ over 3 years, and its Viacom deal $200M+ over more than two years. The e-commerce giant is also paying licensing fees for its ad-free Prime Music service.
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