business news in context, analysis with attitude

by Kevin Coupe

As Amazon looks to cut costs and rightsize the company in the wake of the pandemic, CEO Andy Jassy is looking beyond warehouses and staffing.

Bloomberg reported the other day that he is "taking a hard look at how much the company’s Hollywood studio spends on original TV programming. In recent weeks, he has asked executives for detailed budget analyses of some of their biggest shows, according to people familiar with the matter, scrutinizing the studio’s ballooning costs and mixed track record with audiences."

Amazon's entertainment division, the story says, "which has spent tens of billions of dollars on original programming over the last decade, is an obvious place to look for savings. Last year, Amazon spent $7 billion on original shows, licensed programs and sports, up from $5 billion the year before. Only Netflix and Disney spend more on streaming.

"In the past nine months, Amazon has released at least a half-dozen pricey series that failed to deliver huge audiences. Daisy Jones & the Six, The Power, Dead Ringers and The Peripheral all cost more than $100 million to produce but failed to crack Nielsen’s list of the 10 most-watched streaming programs in the US. Even The Rings of Power ($400 million-plus), a show that attracted a large audience, failed to hold on to most of its viewers over the course of the season, according to The Hollywood Reporter.

"No show illustrates Amazon’s liberal spending better than Citadel, a global spy thriller that cost more than $250 million for one season. Despite being one of the most expensive series in TV history, Citadel has failed to chart as one of the 10 most-watched streaming programs in the US in any week since it debuted, according to Nielsen. It did hit the top 10 among streaming originals for a week, coming in just behind Netflix Inc.’s Barbecue Showdown.

"Amazon has trumpeted the show’s success, and has voiced support by commissioning a second season and continuing work on local spinoffs. It has also boasted of the popularity abroad, especially in India, though it provided no data to prove as much."

I find this to be a fascinating problem, but would argue that the problem is not the amount of money that Amazon is spending, but how it is spending that money.  Amazon, I'd suggest, may want to may fewer programs, but spend more money on the writers who create the content.

I realize that I am making this suggestion at a time when film and television writers are on strike, looking for higher and more relevant compensation and certain protections from innovations such as artificial intelligence.  And, I'll admit that I have a bias on this issue - I am a writer, and while I am not a member of the Writers Guild of America (WGA) I have had a few dalliances (unsuccessful, alas) with the film and television industry.  (Someday - but not yet - I'll tell you about how Stanley Tucci was once interested in a screenplay I'd written.  The subject - go figure - was food retailing.)

If one looks at many - not all - of Amazon's original productions, their problem is that sometimes they seem to have been written by artificial semi-intelligence.  "The Citadel" and "The Gray Man" are perfect examples - they seem to have put more emphasis on their CGI and stunt budgets than on hiring writers who could make them more coherent.  To me, this suggests that Amazon (and I'd make the same argument about many of the other streamers with which it competes) actually is pandering to and underestimating its audiences.

I've always thought of Amazon as a company that appealed to customers' aspirations - that while there were a lot of other more obvious elements in its appeal, that actually was its secret sauce.  But its approach to many of its entertainment properties is kind of Eye-Opening, and makes me wonder if - at a point in its history when it may have moved into a Today-Is-Day-Two-Mentality - the recipe for success has changed, and the old secret sauce has been shelved.