Back to top

Amazon Prime in Focus, New Series to Lend Competitive Edge

Read MoreHide Full Article

Amazon (AMZN - Free Report) is leaving no stone unturned to bolster its video streaming business. Reportedly, the company is going to air a new series on Prime named The Hunt, which is directed by Jordan Peele of Get Out fame and David Weil.

The series is based on the Nazi era in which there is a team of Nazi hunters in New York City in 1977 who finds a conspiracy being hatched to create a Fourth Reich in the United States. To sabotage the move several high ranked Nazi officers employ the hunters. The company will stream this show in 10 episodes in its first season.

Amazon Prime’s contemporary content portfolio, that already contains The Man in The High Castle which is also related to Nazis during World War II, will expand further with the addition of the latest drama.

The series will be co-produced by David Weil and Jordan Peele via Monkeypaw Productions and Sonar Entertainment from which Tom Lesinski and Jenna Santoianni will also join the production team of the series.

We believe the latest move bodes well with the company’s strong focus toward strengthening its Amazon Studio. Coming to the price performance, shares of Amazon have returned 64.8% over a year, outperforming the industry’s rally of 45.9%.

 

 

Prime to Sustain Momentum

Since video streaming remains a very important factor among the others behind the great success of Amazon Prime in the past few years, we believe the increasing number original and acquired series will continue to benefit Prime.

The latest series will expand the vast portfolio of the company’s original series portfolio, which remains positive for Prime’s gaining momentum. The streaming of The Man in The High Castle attracted around 8 million viewers in the United States last year. Since The Hunt also falls under the same category of content, it is likely to attract viewers to platform.

Apart from this, Amazon has also provided green signal to new series Cortés from executive producers Steven Spielberg and Steven Zaillian. Moreover, Amazon Studios acquired the global television rights to Consider Phlebas, the first novel of the culture series by Iain M. Banks.

Further, Prime Video premiered new seasons of Bosch (season four) and Sneaky Pete (season two) in the last reported quarter.

Recently, a letter by Jeff Bezos revealed that Prime has crossed over 100 million of paid members across the world since its inception in 2005. One of the major contributors is Prime Video and thus an expanding content portfolio will continue to benefit the subscriber base of the company.

 

 

Competition Intensifies

Online video streaming is gaining momentum with the growing investments by major players like — Amazon, Netflix (NFLX - Free Report) and Hulu. There are new entrants as well like Facebook (FB - Free Report) and Apple (AAPL - Free Report) .

Although, Netflix enjoys the first mover advantage in the market, Amazon Prime is also gaining traction of late.

The expansion of content portfolio is providing Amazon a strong competitive edge in the industry. Moreover, this expansion is the results of heavy investment on content.

Reportedly, in terms of investment, Netflix’s content investment was the highest in the market which marked $6.3 billion in 2017. However, Amazon also tried to maintain its position and invested $4.5 billion in its content portfolio last year, which exceeded its plan of investing $4 billion on content. Hulu’s spending on content came in $2.5 billion in 2017.

Per the estimates from JPMorgan, Amazon is expected to spend around $5 billion on video content in 2018, focusing more on original content and sports. Netflix is again set to invest around $8 billion, which is again huge whereas, Facebook is likely to invest around  $1 billion on content.

Further, Apple is also steaming up to make a position in the video streaming space and it is likely to launch its streaming service this year.

We note that Amazon’s increasing investment will continue to enrich its video content’s originality which will strengthen its competitive position further.

Currently, Amazon Carries Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.

Click here for the 6 trades >>




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Amazon.com, Inc. (AMZN) - free report >>

Netflix, Inc. (NFLX) - free report >>

Facebook, Inc. (FB) - free report >>

Apple Inc. (AAPL) - free report >>

More from Zacks Analyst Blog

You May Like