What is Amazon Studios in 2023? A Deep Dive for Ecommerce Sellers

As an experienced ecommerce seller, I‘m always interested in moves Amazon makes across its ecosystem. So when they first jumped into original video content back in 2010, I paid close attention.

In 2023, Amazon Studios is an established Hollywood player that‘s evolved from its unconventional beginnings. Read on for my in-depth take as a seller on everything Amazon Studios today – from its business model to pitching scripts and more.

In a nutshell: Amazon Studios is Amazon‘s in-house TV and film studio focused on developing original streaming content. This content helps drive new Prime subscriptions which is good for Amazon‘s bottom line. For third-party sellers, Amazon‘s media ambitions present opportunities like sponsored product placement as well as risks like diverting resources from the core ecommerce business.

The Origins of Amazon Studios

Amazon Studios made its debut in November 2010 as an initiative spearheaded by Roy Price, a former Disney executive. The goal was to democratize content creation by crowdsourcing TV and movie scripts from unknown writers.

For those first 7+ years, Amazon Studios had an open submission policy where anyone could upload their script for consideration. Approved projects would receive a $10,000 option payment. Amazon also stated they would purchase selected TV pilots for $55,000 and movies scripts for $200,000.

However, results were mixed. Despite over 10,000 open call submissions, Amazon only produced a handful of shows under this model like Gortimer Gibbon‘s Life on Normal Street. As an ecommerce seller, it was interesting to watch them take this grassroots approach to content. But it clearly wasn‘t scaling well.

Fast forward to today, and Amazon Studios looks drastically different. While they still consider select submissions, the open call model is gone. These days Amazon Studios operates more like a traditional Hollywood studio focused on developing polished, prestige content.

The Shift to Prestige Programming

In 2017, Amazon Studios hired NBC exec Jennifer Salke as Head of Amazon Studios. She helped spearhead a shift to develop premium "must-see" original programming.

Some of Amazon Studios‘ most acclaimed titles under Salke include:

• The Marvelous Mrs. Maisel – 16 Emmy wins
• Fleabag – 6 Emmy wins
• The Boys – Subversive superhero drama
• The Underground Railroad – From Oscar-winner Barry Jenkins

Amazon is also producing major feature films like The Tomorrow War starring Chris Pratt which tend to get exclusive streaming release windows on Prime Video.

Following the 2021 MGM acquisition for $8.5 billion, Amazon also owns rights to lucrative franchises including James Bond and Rocky. However, the pre-1986 MGM library was sold previously so classic titles aren‘t part of the deal.

In 2022, Amazon Studios invested over $14 billion in video content globally. For comparison, Netflix invested around $18 billion the same year.

Clearly Amazon is willing to spend big money to attract top-tier writing and producing talent. This strategy has paid off with critically acclaimed projects that also drive Prime memberships.

How Amazon Studios Makes Money

As an ecommerce seller, I‘m always curious how Amazon‘s various divisions contribute to profitability. So how does Amazon Studios make money? There are a few key ways:

• Prime subscriptions – Creating addictive original series incentivizes new signups for Prime Video, which in turn drives more overall Prime members. Prime members spend significantly more on Amazon.

• Content monetization – Amazon earns ancillary revenue through content rentals, purchases and ads via Prime Video. They also license titles to other distributors.

• Theatrical releases – For films with box office potential, Amazon partners with theaters then streams on Prime later. This model maximizes profit across platforms.

• In-house production – Producing content via their own studio cuts licensing costs. And streaming originals on Prime Video avoids platform fees.

Back-of-the-envelope math suggests that runaway hits like The Boys or The Marvelous Mrs. Maisel can generate tens of millions in incremental Prime subscriptions. Amazon is happy to keep spending on originals as the return on investment is so clear.

How Video Content Attracts Valuable Prime Subscribers

As of Q3 2022, Amazon Prime had approximately 200 million members worldwide. Analysts estimate 30-40% of them use Prime Video regularly.

Generating addictive original content translates directly into higher Prime membership renewals according to Amazon‘s own numbers. User surveys also reveal how video content drives signups:

• 72% of Prime members say original series are important in deciding to join Prime
• 64% of U.S. Prime members joined specifically for access to movies and shows

Prime members spend an average of $1,400 per year on Amazon compared to $600 per year for non-Prime shoppers. So landing members via video directly boosts Amazon‘s ecommerce profit engine.

Opportunities for Sponsored Product Placement

As Amazon Studios creates more original programming, it opens up opportunities for sponsored product placement.

Imagine your company‘s gadget showing up in the background of a scene on the next Jack Ryan episode. Or the lead character sipping your beverage in The Marvelous Mrs. Maisel. While Amazon doesn‘t currently pursue this revenue stream, I could see it happening down the road.

Paid product placements in streaming shows are a proven money maker. According to Statista, product placement spending in the U.S. totaled over $11 billion in 2021 and continues rising.

For ecommerce companies,sponsored placements in prestige Amazon Studios shows provide a way to reach massive Prime Video audiences. This exposure can drive tangible sales results on Amazon. As their original content expands, it‘s something for sellers to watch closely.

The Risks and Rewards for Ecommerce Sellers

As an Amazon seller, I see both potential benefits and drawbacks from their investment in original video:

Rewards

• More Prime subscribers could mean more customers for my products.

• Possible future opportunities for sponsored product placement to reach Prime viewers.

• Investment in content studios and production talent may improve Amazon‘s overall capabilities.

Risks

• Video content is expensive – resources invested here don‘t improve the core ecommerce business.

• Focus could shift away from the programs and tools sellers rely on if video becomes the priority.

• Increased competition for ad inventory if Amazon monetizes video ads on Prime.

My view is that as long as Amazon keeps improving the seller tools and experience, I‘m happy for them to pursue other initiatives like video. But I‘ll be keeping an eye out for any redirection of resources that could negatively impact sellers.

How Can You Pitch to Amazon Studios Today?

In the early days, anyone could submit their scripts directly to Amazon Studios. But by 2018, they shut down direct unsolicited submissions. So how do you get your project seen by Amazon Studios now?

As a seller not involved in the entertainment industry, I don‘t have production experience to share. But from my outside perspective, here are a few options for getting your work seen:

• Upload scripts to Amazon‘s IMDbPro platform to try generating industry interest. But no direct pipeline.

• Self-publish videos on Prime Video Direct to reach audiences, but this won‘t get Amazon Studios‘ attention.

• Make connections with reps, executives, producers who may be able to refer you.

• Enter prestigious contests like the Nicholl Fellowships to gain credibility. But still an uphill battle.

The reality is you need an influential industry connection to get traction as an unknown. Breaking in without one appears extremely difficult even by Amazon standards.

But by all means, if you have an amazing script, explore any and all options to get it in front of influencers and decision makers. Opportunities exist outside direct Amazon Studios submission if you can drum up some buzz. Don‘t let the obstacles stop you from getting your work out there.

Where Amazon Studios Fits in the Streaming Landscape

In its first decade plus, Amazon Studios has certainly evolved. How does it stack up to other major digital studios?

Netflix – The streaming pioneer, synonymous with binge-worthy originals. Over 209 million global paid subscribers as of Q3 2022.

Hulu – Focused more on licensing shows versus original productions. Now owned by Disney and has around 47 million U.S. subscribers.

Apple TV+ – The new kid on the block (launched 2019). Slowly ramping up originals like hit comedy Ted Lasso. Roughly 20 million subscribers but growing.

Amazon Studios – Found its footing after early growing pains. Now powers Prime Video with acclaimed titles and 200+ million Prime members globally.

Despite initial struggles to find the right creative strategy, Amazon Studios is now a legit power player. The open submission model is gone, but they attract A-list talent capable of delivering addictive hits to drive more lucrative Prime subscriptions.

While Netflix pioneered the streaming content arms race, Amazon leveraged its built-in Prime Video advantage to catch up in a big way. With Prime membership stickiness and bold investments like the MGM deal, Amazon Studios doesn‘t look to be going anywhere.

The Bottom Line for Ecommerce Sellers

As Amazon extends its reach into hardware, cloud computing, digital media and more, should sellers cheer on these moves or view them as distractions?

My perspective is that as long as the core platform keeps improving for sellers, Amazon‘s side ventures are generally welcome. A rising tide lifts all boats. More Prime members driven by original video should mean more potential customers.

However, Amazon is a complex ecosystem where small changes can have outsized impacts. Sellers must pay attention in case initiatives like Amazon Studios divert focus and resources away from the programs we rely on.

For now, Amazon Studios is elevating Amazon‘s profile in the entertainment world without negatively affecting ecommerce sellers. But maintaining that balance will be an ongoing tightrope act. As an experienced seller, I‘ll definitely be watching closely and staying tuned into the latest Amazon Studios developments.