Amazon to develop its own TV shows

Amazon is the latest content provider to turn its hand to developing original material, as it announces that its Amazon Studios division is set to develop comedy and children’s shows for its video-on-demand (VoD) service, Amazon Prime. The online retail giant is inviting content creators to pitch ideas for TV shows, and Amazon Studios will select one concept a month to develop further, before gauging consumer appetite for the ideas by floating ideas to Amazon Prime subscribers.

If any ideas are commissioned as a full series, the creator receives USD55,000 and a 5% cut of any merchandise  sales, as Amazon aims to attract content creators straight away. The move will intensify the competition between Amazon and rival VoD services such as Netflix, Hulu and YouTube, all of which are making concerted pushes into producing original content as they target higher ad rates and paying viewers.

Netflix shelled out USD100m last year to obtain the rights to original series, House of Cards, before signing a deal with Twentieth Century Fox Television in November to become the exclusive broadcaster of the rebooted version of popular US sitcom, Arrested Development. Hulu is also set to air original shows later this year, beginning with the political comedy, Battleground, as well as a travel show. However, YouTube is perhaps the largest mover in obtaining exclusive content, revamping its website and launching nearly 100 channels in collaboration with content providers such as Demand Media and Reuters. Premium ad rates and moves into exclusive and original programming places also pitches these services into direct competition with traditional broadcasters, as they continue to sweat over consumers potentially cutting the cord in favour of cheaper, on-demand platforms.

The move comes amid reports that Amazon is struggling for subscribers to its Prime VoD service. Amazon Prime has taken on a renewed importance since the launch of the Android-based Kindle Fire tablet, with the online retailer seeking to offset the reported USD4 loss it makes on every physical device with significant revenues from digital content. A Bloomberg report in February claimed that Amazon Prime had between 3m to 5m subscribers, with the latter figure still only half of the 10m pegged by analysts.

Amazon Studios launched in November 2010 targeting scriptwriters to submit ideas for films, and Amazon linked up with Warner Bros Studios to offer it first-refusal on developing successful ideas. Amazon says that the division is currently developing 15 projects as a result of the pitch, from 700 test movies and 7,000 scripts submitted to date.