Amazon is shelling out big money to compete with other streaming platforms like Netflix and Hulu, with a new report indicating that its planned Lord of the Rings series could wind up costing as much as $500 million for its first two seasons, which is crazy since the original trilogy only cost $281 million according to Box Office Mojo.
The report comes from Reuters, who studied internal documents from the company detailing the cost/benefit formula that Amazon uses to determine which shows are successes or failures. The metric they use is called "first stream," or what new shows Amazon Prime subscribers are watching when they first sign up. So far, the first seasons of Man in the High Castle and The Grand Tour have provided the most bang for their buck. For example, Man in the High Castle Season 1 cost $72 million to produce and drew in an audience of 1.15 million new Prime members during their first stream. That's a cost of around $63 per subscriber -- not a bad deal. On the other end of the spectrum, Season 2 of Man in the High Castle cost $107 million to make with an average cost of $829 per subscriber. With Season 3 on the way, one has to wonder what this downhill trend for such an expensive show might mean for its future.
Looking ahead, Amazon has already announced that it will be developing a Lord of the Rings series set before the events of the original films. The company reportedly spent $250 million to acquire the rights alone and, according to that same report, marketing and productions costs for two seasons could raise the investment to $500 million, which is three times the amount it cost to make Man in the High Castle Seasons 1 and 2 combined. Taking the "first stream" approach into account, Amazon Prime would have to obtain three times as many new subscribers to account for an equal payoff as Man in the High Castle.
That's a pretty ambitious hill to climb but it's not surprising since CEO Jeff Bezos isn't afraid to take risks. In 2016, Bezos said, "When we win a Golden Globe, it helps us sell more shoes." From his point of view, more prestige means more customers. HBO took a similar risk with Game of Thrones back in 2011, which at the time was a financial gamble since the network had never dabbled in the fantasy genre before.
With Bezos and his company's seemingly endless amounts of money, who knows what exciting new Amazon series will be in store for their subscribers. What do you think of Amazon's big investment in Lord of the Rings? If you aren't already a Prime Member, would the series be enough for you to join? Let us know what you think in the comments.