Amazon Studios chief Jennifer Salke, who joined the company in May, gave an interview to The Hollywood Reporter published on Monday in which she laid out the thinking behind the studios' new focus on streaming content for its Prime platform.
"Coming from traditional TV, I was very clear what my report card was. It was ratings. It was advertising dollars, and then whatever we could sell to Netflix. Here, it's basically, how are you enhancing Prime membership, and how are you bringing new subscribers to Prime," Salke said about her directive.
Taking its cue from Netflix, Salke said Amazon plans to limit or even skip the theatrical run of some of its films and make them exclusively available on Amazon Prime, something it hadn't done previously. The company is planning to release about 30 original movies a year.
In turn, Netflix has loosened its stance of not giving films theatrical releases before making them available on its service, notably with best-film Oscar contender Roma.
Salke joined Amazon Studios last year after serving for six years as NBC Entertainment's President. Her predecessor, Roy Price, stepped down over sexual harassment claims in October 2017.
Amazon was very active at the iconic Sundance Film Festival, spending a record $47 million for the rights to five independent films that were featured at the festival.
"We're seeing the movie. I'm buying it a few hours later. When I was at Sundance, not one person [at Amazon] ever called me and said, 'What are you doing? Are you spending too much," Salk said of the response to her torrid spending pace.
Amazon isn't the only company coming for Netflix's crown however. Apple Inc. (AAPL) is putting more emphasis on its services segments as iPhone sales falter, and part of that push is beefing up its original streaming content offerings.
The company has spent more than $1 billion to create original shows this year, according to the Wall Street Journal, and is considering bundling its video offerings into a monthly subscription that would also include cloud storage. Apple has said it hopes to boost paid subscription to 500 million across its platform by 2020, up from 360 million now.
Meanwhile, Amazon is estimated to have spent $5 billion on video content in 2018, up from the $4 billion it spent the previous year. Netflix, however, spent an estimated $8 billion on video content in 2018.
Shares of Amazon are up 1% Tuesday.
Amazon and Apple are both holdings in Jim Cramer's Action Alerts PLUS charitable trust.