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Amazon seeks top film executives to shore up entertainment division

Yahoo Finance reporter Allie Canal details a new report that Amazon is looking to hire top execs as it seeks to ramp up its entertainment division among the ongoing streaming wars.

Video transcript

BRIAN SOZZI: Streaming giant Amazon is facing competition on all fronts. And according to a Wall Street Journal exclusive, the company is looking to make a tactical hire to help shore up its entertainment division. Yahoo Finance's Alexandra Canal joins us for more on this one. Wow, talk about potential poaching here.

ALEXANDRA CANAL: Yeah, potential poaching. Amazon really looking to beef up that film division. According to that report, they are in talks with Scott Stuber. He's the VP of original films at Netflix. They were also talking to some executives at Paramount Pictures.

But this comes at a critical time for Amazon and a critical time for streaming in general. We got the news earlier this week that Walmart has partnered with Paramount Global to release Paramount+ to those Walmart+ subscribers. We have YouTube TV potentially rolling out their own online marketplace to compete with the likes of Roku, Apple, Amazon.

So there's a lot happening in the space right now, but consistently, when I've spoken with analysts, they've told me that Amazon Prime Video is the dark horse in the streaming wars. One of the main reasons why? It's a tech company. It has a ton of money, a ton of resources.

If you just look at their recent deals, they struck that 11-year deal with the NFL to stream Thursday night Football. That's $1 billion per year to the NFL. Their new "Lord of the Rings" series, that's reportedly costing $465 million for just the first season. And to put that in context, the entire "Lord of the Rings" trilogy, the movie trilogy, costs $281 million, so.

BRIAN SOZZI: I agree. This is a great platform, but you know what's not on here? "She-Hulk" that is on Disney+.

ALEXANDRA CANAL: [INAUDIBLE]

BRIAN SOZZI: It starts today. It starts streaming today. I had to get that in. Julie, over to you.

JULIE HYMAN: Sozz is very excited about that. And I'm excited watching that "Fleabag" footage, which is reminding me, I need to go back and watch more of that show, which I really liked. Yes, Amazon, it's sort of the dark horse, but it's so interesting to me what streaming does for Amazon versus what it does for all of these other companies because, of course, there's no-- is there a separate Amazon Prime Video subscription even?

ALEXANDRA CANAL: No--

JULIE HYMAN: No, [INAUDIBLE]

ALEXANDRA CANAL: --they don't directly monetize from it. Yeah, so the economics with this is much different from all of the other players. Now, some of these pure play media giants, and Netflix included, they need to prove to investors that their model works.

But for a company like Amazon, or even Apple with Apple TV+, it doesn't really matter. They can have a few wins and a few failures. And they're not going to get criticized for it. So really, this is just a move for them to have a stickier platform, for them to keep people in the ecosystem.

And because of that, it's less burdensome for them to really prove that the streaming model works. It's more experimentation. So I think because of that, because they have those resources to back it up, and because investors aren't so critical on the video side for these companies, they're able to take a little bit more risks than some of the other players out there. And I think in the long-term, that's going to be an important differentiating factor.

BRIAN SOZZI: I promised myself, no more "She-Hulk" questions. I'm not asking you any more "She-Hulk" questions, but--

ALEXANDRA CANAL: Well, we need to get your review after.

BRIAN SOZZI: I'm going to get it, but look, Netflix is losing talent. They have let go a lot of people recently after a couple of bad quarters. Now they're having key talent poached. I mean, you have to think, what does that do to the growth, the forward growth of that company?

ALEXANDRA CANAL: Yeah, they're losing talent. They're also severely cutting back on spending. They were the one platform that consistently said, we are going to keep spending money to keep getting that top level talent, to keep pushing out these top series, these top movies. But now they're losing those subscribers. They need to cut back. They can't keep spending $17, $18, $20 billion every year on this content.

So they're having to reevaluate their business. Profitability has become key for investors. Free cash flow has become key. And a lot of these companies are now having to pull back on areas that they went fully in on in order to accommodate for that. So we're entering this new stage of the streaming wars. I'm excited to see what happens.

BRIAN SOZZI: Let us know. I'm excited for your review of "She-Hulk."

ALEXANDRA CANAL: I will.

BRIAN SOZZI: Allie Canal, thank you so much.