Amazon up 28% spending for video and music
Total spending of Amazon for video and music was $13.0 billion and $16.6 billion for the years ended December 31, 2021 and 2022, up 27.7 percent year-over-year.
Total video and music spending includes licensing and production costs associated with content offered within Amazon Prime subscriptions, as well as costs associated with digital subscriptions and content sold or rented.
On a principal basis, produced and licensed video content is monetized together as a unit, referred to as a movie group, in each of the major geographies in which the Company offers Amazon Prime subscriptions.
Impairment of these movie groups is assessed whenever an event occurs or circumstances change that indicate that the fair value is less than the carrying value.
Total capitalized costs for video, which is primarily published content, and music at December 31, 2021 and 2022 were $10.7 billion and $16.7 billion.
Amazon
The company obtains video content, including television episodes and movies, and music content for customers through licensing agreements that have a wide range of licensing provisions including fixed and variable payment schedules.
When the amount of the license fee for a specific video or music title can be determined or reasonably estimated and the content is available to it, the Company recognizes an asset and a corresponding liability for the amounts due.
Amazon also develops original video content, the production costs of which are capitalized and amortized to «Cost of sales» primarily on an accelerated basis based on the estimated viewing patterns associated with the content.
The weighted average remaining life of its capitalized video content is 2.6 years.
Amazon continually reviews usage and viewing patterns that affect the amortization of capitalized video content and reflects any changes prospectively.
Changes in historical and anticipated viewing patterns are lengthening the weighted average life of Amazon’s capitalized video content.
The company expects changes in viewing patterns to positively impact 2023 operating income by approximately $1.0 billion, generally on a proportional basis throughout the year.
