Why Streaming Won't Always Be a Loss for Amazon

Analysts have long suspected that Prime Video is a huge loss leader for Amazon (NASDAQ: AMZN). However, the company has greatly expanded its streaming business in the last few years. Here's why the company's recent ventures in the streaming market will combine to pay off in a big way.

Amazon launched Prime Video, then Amazon Unbox, in September 2006 as a place where customers could download thousands of movies, but pivoted to streaming in 2011. The company has since sunk billions of dollars into Prime Video, spending $13 billion on movies, series, and music in 2021. Despite the streaming service's expense, Amazon has used it as an attractive addition to the company's Prime membership.

Amazon's streaming business has steadily grown to allow consumers to rent and buy content, add Amazon Channels, watch live sports, stream games, and more. For instance, Amazon launched its streamer Freevee, then IMDb Freedive, in 2019 to cash in on increasing demand for ad-supported streaming services. Few companies have diversified their footholds in the streaming industry like Amazon. The company has skillfully permeated almost every facet of the market, creating a services ecosystem that is only truly rivaled by Apple's growing services business.

Source Fool.com