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Amazon spends £1bn on TV and film in UK as Netflix cuts

Amazon has invested more than £1bn on TV, movies and live sporting content in the UK in recent years and plans to increase spending to make it an essential streaming service for cash-strapped families.

This is the first time that Amazon has disclosed the level of investment in Prime Video in the UK, in the period since 2018, as competition for viewers has intensified amid the rising cost of living crisis.

While Amazon’s annual UK budget lags behind the $1bn (£810m) Netflix spent on hits from Bridgeton to sex education, it is growing rapidly – ​​with big releases such as Lord of the Rings series in the pipeline – While its rival is in the process of cutting budget and staff after recording the first drop in customers in a decade.

“Our investments are accelerating year after year,” Prime Video UK managing director Chris Bird said at an event in central London on Thursday, before unveiling a large slate of new programming. The figure has been crossed, which seems like a milestone to recognize our development here. We are as fully committed to our future in the UK as we are across Europe and the world.

Amazon has doubled down on its commitment to sign a record-breaking long lease deal for its first permanent studio space in the UK at Shepperton Studios, where Netflix also has a deal, and the surprise move to move shooting to Mega Decision Making- Budget Lord of the Rings TV series from New Zealand to UK.

New Zealand’s Minister of Economic Development and Tourism, Stuart Nash, said the first series in the saga, called The Rings of Power, which will premiere later this year, will cost around NZ$650m (£332m) to make.

Bird acknowledged that the streaming market is not immune from the cost of living crisis, but maintained that Prime Video has achieved “must have” service status alongside Netflix.

“We are looking forward to a challenging time” [for households] Onward,” he said. “Inflation is rising, cost of living is rising and we do not expect the same level of video engagement from customers as we saw during the pandemic. But this is not reducing the investment at all. We are not expecting a dramatic slowdown. We are still seeing growth in our business and the customers are delighted and excited.”

Netflix had 222m global subscribers, Prime Video 152m and Disney+ 138m at the end of the first quarter. According to Ampere Analysis, in the UK, Netflix remains the market leader with an estimated 14 million subscribers, followed by Prime Video at 11.9m and Disney+ at 4.8m.

“We expect customers to be more sensible in their purchase choices,” he said. “It’s been about multiple subscriptions in the past, but with the challenges of cost of living it probably falls short.”

As well as its own subscription video-on-demand service Amazon has an ad-funded free service called Freeway, which was rebranded from IMDb TV last month, and with 100,000 titles to buy or rent— To provide subscriptions to partner video channels such as reality TV streamer Hue.

Netflix has said it is to launch an ad-funded subscription tier later this year to attempt to restart growth.

“We are a separate service,” said Bird, who works at British streaming site Lovefilm, which was bought by Amazon in a £200m deal in 2011 to enhance its ambitions to take on Netflix in the UK. Perhaps small in quantity compared to other services, our goal of being seen as high quality is very well crafted and distinctive.”

While US streamers including Amazon, Netflix and Disney continue to inject an increasing amount of money into British-made shows and movies, the UK remains the highest spender traditional national broadcaster.

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The total annual content budget of the BBC on TV, radio and online is approximately £2.3bn, of which approximately £1.6bn is spent on TV content. ITV spends around £1.1bn annually on content for its portfolio of channels, while Channel 4’s £700m budget is the same as that of Netflix.

Last year, a record £5.6bn was spent in the UK making blockbusters such as Mission: Impossible 7 and big-budget dramas, including Bridgeton.

This was double the level of investment in 2020, when the spread of the coronavirus shut down the production industry for months, and nearly £1.3bn more than the previous record in pre-pandemic 2019.

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