Amazon.com, Inc. (AMZN)’s $2.5 Billion Fight Against Netflix, Inc. (NFLX)

Amazon.com, Inc. (NASDAQ:AMZN) has taken up on a new opponent in form of Netflix, Inc. (NASDAQ:NFLX) and this time it’s not the price war that the e-commerce giant has in mind as its war strategy, which was the case in its recent spat with Hachette Book Group. Amazon is planning to outspend its rival this time. In an article on Seeking Alpha by Eric Jhonsa, the amount to the tune of $2.5 Billion was quoted for Amazon’s content related expenses next year.

The article quoted Alliance Bernstein, the Asset Management Company’s research.

The expenditure on the content which also includes streaming license rights on top of the original content is an increase from $1.5 to $2 billion that Amazon.com, Inc. (NASDAQ:AMZN) spent in 2014, according to the article. In contrast, according to an article on theguardian, Netflix, Inc. (NASDAQ:NFLX) planned to spend about $3 billion on just the content during 2014.

Amazon.com, Inc. (NASDAQ:AMZN) will have to bulk up its viewers for the Prime Instant Video, if it is to compete with Netflix, Inc. (NASDAQ:NFLX) and the only way that can be done is through attractive content.

The article reported that according to Bernstein’s research, which is based on a survey of 400 subscribers of Amazon’s Prime,  only 13% of the participants subscribed to Prime in order to get access to Prime Instant Video. The statistic is reflective of lack of popularity of the e-commerce giant’s content when it comes to its streaming service.

Netflix, Inc. (NASDAQ:NFLX) is not an easy contender to beat in this regard. The streaming company is always breaking new grounds and recently announced that it will be jointly releasing the sequel to Ang Lee’s critically acclaimed, Crouching Tiger, Hidden Dragon, with IMAX Corporation (USA) (NYSE:IMAX). It is a release of its own kind, the like of which has not been witnessed before.

Amazon.com, Inc. (NASDAQ:AMZN) might have to come up with more innovative ways than just spending a bunch of cash on the content if it is to surpass Netflix, Inc. (NASDAQ:NFLX) in terms of ‘streaming’ revenues.

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