Amazon's Prime Video changes course for surprising reason

This year, one of the biggest power plays in streaming didn't come with a red carpet or a big trailer launch. 

As the streaming market reaches a turning point, Amazon  (AMZN)  made a quiet change at the top of the company that may alter how it conducts business in the entertainment industry.

In October, Amazon will hand its MGM Studios' international television business to a CEO who has been with the company for a long time. 

The new executive's CV is like a highlight reel for Netflix  (NFLX) . People who aren't in the business may not recognize the name right away, but the shows he helped develop, such "Stranger Things," "Bridgerton," "The Queen's Gambit," "Ozark," and others, are all quite popular on the platform.

He has worked on Netflix's original episodes for more than 14 years, but now he's going to try something new: transforming Amazon's TV shows from the inside out.

As the streaming war moves from getting more subscribers to making money and standing out from the competition, the MGM Studios leadership change poses a big question: Can transferring Netflix's creative talents to Amazon help it reap more from its investment in entertainment?

The answer might change the next phase of Prime Video, and it could even alter the balance in a market where margins are shrinking, competition is becoming more sophisticated, and content alone is no longer enough.

Amazon MGM's bold new hire raises the stakes in streaming war with Netflix

Peter Friedlander will start his job as head of international TV at Amazon MGM Studios on Oct. 6. This isn't simply a shift in personnel; it's a sign of a new approach that he is taking over from current CEO Vernon Sanders. 

Friedlander is more than just another experienced executive. He was the first person Netflix recruited to develop original shows and helped set up the slate that characterizes contemporary streaming.

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His fingerprints are all over "House of Cards," "Orange Is the New Black," "Wednesday," and "The Night Agent." These shows did more than just get people to watch them; they also built Netflix's brand, helped it build its membership, and helped justify its high price at a time when people were spending a lot of money. 

By early 2025, there were 260.28 million customers.

Amazon has now given him responsibility over its international schedule, which includes MGM Television, MGM Alternative, and Prime Video originals. The problem isn't whether Friedlander can make hits. The issue is whether Amazon is ready to turn its large entertainment business into a steady, competitive source of engagement and profit instead of a big cost center.

Exact numbers are hard to estimate, but Amazon, without question, is spending a lot on content. 

Its Amazon’s 2023 video+music content spend was $18.9 billion, and reports suggest last year, the tech giant shelled out “around $7 billion” on original content, certainly nothing to scoff at.

From Bond to blockbusters, Amazon still needs cultural hits

Amazon's choice to hire someone is in line with past choices. 

It now has creative authority over the James Bond franchise. The conglomerate also stated it would work with Sony to distribute the movies throughout the globe and have restructured their content operations under a smaller hierarchy led by Michael Hopkins. 

The business has given the green light to big swings in genre, such as "Subversion," a high-stakes submarine thriller with Chris Hemsworth.

But up until now, Amazon's content strategy didn't have a defined creative side. It has tried prestige ("Manchester by the Sea"), spectacle ("The Rings of Power"), and legacy IP ("Coming 2 America"), but it hasn't been as successful or had as much of a cultural influence as Netflix. 

Friedlander may change this.

Even so, creative buzz won’t be the only thing that decides success. Wall Street wants operational leverage. Last year, Amazon made $68.6 billion in operating income, but Prime Video is still a low-margin business inside the company's complex ecosystem. 

It's not obvious whether this new chapter will lead to additional subscribers, better use of content spending, or real income benefits.

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Can you see the irony? Amazon is now leveraging the same programming DNA that made Netflix impossible to halt in the past. 

As Netflix's stock price climbs by over 40% this year, expectations shift and ad-tier revenue grows, placing pressure on Amazon and its competitors. This makes it more important to demonstrate results instead of simply goals.

Amazon MGM’s $10 billion question

It would make sense for Amazon to split Prime Video and MGM Studios into separate companies due of the money, but it doesn't do that. 

In 2024, Amazon made $68.6 billion in operating profits, which was 86% more than the year before. 

It made a profit of 10.8% throughout its whole empire. It wasn't because of entertainment that the company grew; it was because of Amazon Web Services and how cheap it is to purchase online.

Amazon paid $8.45 billion for MGM in 2021. Since then, the studio has been both a useful asset and a strategic test for the firm. 

Prime Video is on par with Netflix in terms of yearly content expenses, which are over $10 billion, but it doesn't have the same apparent return on investment. Even though Netflix made $11.08 billion in sales and $3.13 billion in net earnings in its most recent quarter, Prime Video's success is still based on how many people watch it.

Because of the disparity, the Friedlander hire is critical. Amazon's balance sheet can endure testing, but financial uncertainties remain.

Amazon investors are asking tough questions:

• How much incremental value does Prime Video drive for e-commerce loyalty?
• Can theatrical distribution partnerships with Sony and global IP bets such as James Bond scale efficiently?
• Most importantly, can a Netflix-trained programming hand translate into sustainable returns, rather than costly one-offs?

Those in charge at Amazon realize what's at risk. 

With tech companies like Apple getting into AI-bundled media and Netflix raising its outlook because of more subscribers and ads, Prime Video can no longer be just a side business. 

It needs to show that it belongs in the main portfolio.

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