Amazon Spent $22.4 Billion on Content in 2025, Up 10%

Amazon disclosed a significant 10% increase in its spending on video and music content for 2025, with the total reaching $22.4 billion. This investment, detailed in the company's annual SEC filing released Friday, covers the licensing and production costs for its Prime Video and Amazon Music services. The announcement came alongside Amazon's fourth-quarter earnings, underscoring the tech giant's deepening commitment to the global entertainment arena, where it competes head-to-head with established studios and other streaming platforms.

The net book value of its content library also grew, rising 9% to $21.3 billion by year's end. While a colossal sum, this expenditure represents only one facet of Amazon's diversified financial strategy. In a move highlighting its broader priorities, CEO Andy Jassy revealed plans to increase total capital expenditures by 50% to $200 billion in 2026, with a major focus on artificial intelligence infrastructure. As media analyst Clara Mendez of TechInsight Group observed, "The content budget is substantial, but its primary function is to attract and retain subscribers for the wider Prime ecosystem. The real strategic heavy lifting and future growth are increasingly tied to AI and cloud computing."

A major driver of this content spend is live sports, a proven tool for securing consistent viewer engagement. Amazon pays roughly $1 billion per year for its "Thursday Night Football" package from the NFL, and the 2025 season was its most-watched yet, averaging over 15 million viewers. The company's sports portfolio is expansive, also including broadcast rights for the NBA, WNBA, NWSL, and the UEFA Champions League in key European markets. On the scripted front, Prime Video has cultivated a slate of popular originals like "Fallout," which premiered its second season in December, "Reacher," and the expensive fantasy series "The Lord of the Rings: The Rings of Power." These efforts have helped Prime Video amass over 315 million monthly viewers globally, with ad-supported tiers now launched in 16 countries.

The financial rationale behind this strategy is becoming clearer. In the fourth quarter, Amazon's advertising revenue surged 23% to $21.32 billion, slightly above expectations, while revenue from subscription services—a category dominated by Prime memberships—grew 14% to $13.12 billion. The company employs meticulous accounting for its content, amortizing costs based on projected viewership. The weighted average remaining life of its capitalized video content is now 3.2 years, a slight increase from 3.1 years in 2024. According to the filing, licensing deals often involve complex payment structures with both fixed and variable components, with costs booked as an asset and a liability once a title is available for streaming and its fee can be reasonably estimated.

For its in-house productions, Amazon capitalizes the full production cost upfront. These costs are then amortized, typically on an accelerated schedule that reflects the high initial viewership most series experience upon release. This accounting methodology is standard yet crucial in the streaming industry, allowing Amazon to match expenses with the revenue-generating lifespan of its content and manage the substantial upfront investments required to compete.