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In 2026, Amazon has significantly increased its total expenditure on content, reaching an impressive $22.4 billion, a remarkable growth of 10% compared to the previous year. This data was revealed in the company’s annual 10-K filing with the SEC, shortly after the reporting of their Q4 results for the same year. This monetary commitment encompasses both video and music content, crucial components of Amazon’s offerings through its Prime membership.
The breakdown of this substantial investment includes not only production costs but also licensing fees associated with various mediums available to Prime members, such as Prime Video and Amazon Music. The total capitalized costs for video and music content as of December 31, 2026, stood at $21.3 billion, marking a 9% increase from $19.6 billion the previous year.
Understanding Amazon’s content investment strategy
For many entertainment companies, content expenditure represents the largest segment of their budget; however, this is not the case for Amazon. The company has ambitious plans to ramp up its capital expenditures by an astonishing 50% in 2026, aiming to allocate $200 billion towards various initiatives, particularly in the realm of artificial intelligence (AI), according to CEO Andy Jassy.
Among the notable expenses in Amazon’s content budget are the rights fees associated with the NFL’s Thursday Night Football. Estimates suggest that Amazon commits nearly $1 billion annually for this package. Notably, their fourth season of this series on Prime Video recorded the highest viewership to date, averaging over 15 million viewers per episode, reflecting a remarkable 16% increase.
Expanding sports and original content portfolio
Amazon’s sports rights extend beyond football, as they also hold broadcasting rights for the NBA, WNBA, and NWSL, as well as the UEFA Champions League in select European markets. This diverse portfolio not only enhances viewer engagement but also solidifies Amazon’s position in the competitive streaming landscape.
Additionally, Prime Video boasts a rich array of original series, including popular titles such as Fallout, which launched its second season in December, and Tom Clancy’s Jack Ryan. Other notable productions include Reacher, Upload, and Bosch. The breadth of Amazon’s content offerings is further complemented by films and series produced by MGM Studios, such as Red One and The Lord of the Rings: The Rings of Power.
Financial performance and advertising revenues
Amazon’s Q4 results paint a vivid picture of its financial health, revealing a net sales surge of 14%, reaching $213.4 billion compared to $187.8 billion in Q4 of 2026. The growth trajectory remained robust, with North America segment sales rising by 10% to $127.1 billion, while international sales grew 17% to $50.7 billion.
Operating income for the fourth quarter also saw an increase, climbing to $25.0 billion from $21.2 billion the previous year. Notably, Amazon’s advertising revenue reached a remarkable $21.32 billion, reflecting a 23% increase. This growth slightly exceeded market expectations and showcases the effectiveness of Amazon’s advertising strategy.
Subscription services growth
Moreover, revenue from Amazon’s subscription services rose by 14% to $13.12 billion, which encompasses fees from both annual and monthly Prime memberships, as well as digital services like video and music subscriptions. As of the end of 2026, the average lifespan of Amazon’s capitalized video content was 3.2 years, a slight increase from the previous year.
Amazon’s aggressive investment in content, coupled with its strategic expansion in advertising and subscription services, positions the company for sustained growth in the competitive streaming market. With a clear focus on enhancing viewer engagement through a diverse array of offerings, Amazon is poised to continue shaping the future of entertainment.