Amazon Knows Which Original Series Makes Most Profits

• There are around 26 million Amazon Prime Video subscribers in the US.
• The company keeps track of how their original programming performs in terms of attracting new users. 
• Besides direct profit from the success of a show, the e-commerce company also earns as the users subsequently indulge in a spendthrift.

Amazon is known for always withholding information about their total number of Prime subscribers. However, Reuters recently got their hands on some leaked documents which revealed that Amazon Prime Video has about 26 million viewers in the US, including viewers of Amazon original TV shows and movies as well as non-original content.

In comparison, Netflix, the leading figure in the world of video streaming services has nearly 56 million paid users. Furthermore, Netflix is looking to invest around $8 billion in 2018 for producing a diverse array of original content. In comparison, Amazon has a lower subscriber count as well as lower subscription fees. So it is very confusing to think why Amazon has a video production budget as high as $5 billion?

Well, the e-commerce giant likes to keep a close eye on shows that end up leading to highest conversion in Prime membership count. For example, the Amazon original series, The Man in The High Castle, one of their most costly productions rolls in 1.15 million new subscribers. So for a budget of $72 million, which went into making and marketing the show, the company got 1.15 million new conversions.

Image Courtesy of The Edge

The company even has a procedure to count which shows are generating the biggest profit for them. Let's say non-prime users watched the first episode of The Man in The High Castle and liked it so much that they subscribed to continue viewing. So if the user subscribed to their $99/year plan and taking into account that the show has 1.15 million viewers and cost $72 million to make, it costs Amazon $63 per subscriber to make the show. That means the Amazon original series has earned around 36% ROI for the company, which is great.

Furthermore, after joining Amazon Prime to view their original series, people also end up on a shopping spree, in attempts to make the most out of their subscriptions. With all these information together, it is rather clear how the company is making profits and why they are going forward with their huge Amazon Prime Video production costs.