Amazon spent $1B on Prime Instant Video in 2014

Amazon (NASDAQ:AMZN) reported spending $1.3 billion on its Prime Instant Video last year as the retailer invests in the service to grow its number of loyal shoppers.

Amazon is trying to keep up with its competitor in the streaming video space, Netflix, which spent $3.8 billion in 2014, reported Variety.

CEO Jeff Bezos revealed during Amazon's fourth quarter earnings that Prime membership grew last year by 53 percent worldwide, and 50 percent in the United States. The large spike indicates that shoppers were not much affected by the 25 percent hike in the price of membership. Over the holidays alone, Amazon added 10 million new members.

"Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid," Bezos said in a statement. "In 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We'll continue to work hard for our Prime members."

In July of 2014, Netflix reported it had 50 million subscribers in 40 countries. And while both retailers are using original content to generate buzz, most of their budgets go toward licensing TV shows and movies from Hollywood.

For example, Amazon has a partnership with HBO that makes the e-commerce company's Prime Instant Video the only online-based subscription service to offer past seasons of exclusive HBO programming.

Last month Amazon received several Golden Globe wins for its original program, "Transparent." And other retailers are hoping to emulate Amazon's success as a content creator. Online retailer Overstock announced it would also create original streaming content to grow membership in its Club O membership program.

For more:
-See this Variety article
-See this Amazon statement

Related stories:
Amazon expands free shipping
Amazon sellers top 2B items in 2014
Amazon unveils one-hour delivery in New York
Amazon launches Amazon Dash for delivery of groceries
Netflix reaches 50 million subscribers

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.