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Amazon.com Inc. (AMZN) Goes into “Top Gear” in Netflix Inc. (NFLX) Battle

Amazon.com Inc grabs top gear from netflix inc

Amazon.com, Inc. announced on Thursday that it was going to put together a show with the hosts of Top Gear, the British Car show that is among the world’s most popular TV properties. The BBC cancelled the series after host Jeremy Clarkson was accused of assaulting a member of the crew.

Amazon.com Inc grabs  top gear from netflix inc

Netflix Inc was widely rumored to be looking to close a deal with the three men, but Amazon appears to have outbid Reed Hastings’ firm. The move shows that Amazon is really serious about building out its video network despite the gap that has grown between it and Netflix Inc. in recent years.

Amazon gets into Top Gear

The new show isn’t likely to be called Top Gear as the BBC has retained the rights to the show, but it will likely feature the same type of format and  content. The show, which stars Jeremy Clarkson, Richard Hammond and James May, centers around cars and driving and includes a wealth of novelty challenges that involve cars in some way.

Mr. Clarkson, who didn’t exactly leave the BBC on good terms, said “I feel like I’ve climbed out of a biplane and into a spaceship.” It seems that Amazon   has given the former Top Gear hosts creative control over the entire project.

Amazon doesn’t offer its video as a separate service. Instead it comes as part of the firm’s premium membership package. The firm calls that product Prime, and it was responsible for the surprise profit that Amazon managed in the three months through June.

 Netflix is way ahead

The lead that Netflix Inc has in online video is likely part of the reason that Top Gear went to Amazon. Netflix simply doesn’t need another major IP as much as Amazon does. The firm has plenty of dramas that people pay their subscription to watch.

Amazon doesn’t offer much in the way of original TV. Even acclaimed drama like Transparent hasn’t had the effect of Orange is the New Black, or House of Cards. Splashing out on a proven concept like a Top Gear-styled show is an expensive way to make a certain hit.

Netflix and Amazon    may have been in a bidding war for the new Jeremy Clarkson headed show, and the Seattle firm may simply have been willing to pay more.

CEO Jeff Bezos is known for his invest-first policy. If he really wanted to put that show on Prime, there’s little enough limit on the size of the contract he would be willing to sign. With billions and billions in sales each year, it’s unlikely that shareholders will be miffed by a big content outlay.

Amazon Prime is not going to catch up to Netflix in terms of hours watched any time soon, and it may never get there. All Jeff Bezos and his team want to do is convince people that paying $99 per year for Prime is worth it. Putting Top Gear on the screen is sure to help the firm make that case.

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