Amazon’s $250 M fight to give flight to 'The Lord of the Rings'

Amazon’s $250 M fight to give flight to 'The Lord of the Rings'

Wednesday November 15, 2017,

4 min Read

My precious.” For most ‘Lord of the Rings’ fans, Gollum’s voice would ring from JRR Tolkein’s legend.

But Amazon seems to be echoing the same especially after the recent news came out of Amazon having acquired the television rights to JRR Tolkien’s fantasy series The Lord of the Rings.

After weeks of fighting it out with video streaming platform, Netflix, and premium cable service HBO, media outlets globally are estimating the size of the deal at around $250 million.

But, that’s not about it? These figures do not include production budgets, which are estimated to soar more than $150 million per season, not to forget the other millions of dollars in the marketing budget.

Just to give you an idea, HBO’s Game of Thrones has been soaring its budgets to keep the series at the top of audience’s favourite charts.

The George RR Martin’s fantasy fiction took close to $6 million per episode through the first two seasons. The Entertainment Weekly had reported that costs had ballooned to at least $8 million by the fifth season and up to $10 million for seasons six and seven.

And Amazon doesn’t seem to be backing off from the challenge to make sure the legend of LOTR remains grander than ever.

What does Amazon have to say?

In a press release dated yesterday, Sharon Tal Yguado, Head of Scripted Series, Amazon Studios, said,

The Lord of the Rings is a cultural phenomenon that has captured the imagination of generations of fans through literature and the big screen. We are honored to be working with the Tolkien Estate and Trust, HarperCollins and New Line on this exciting collaboration for television and are thrilled to be taking The Lord of the Rings fans on a new epic journey in Middle Earth.”

But airing the series and TV show are not the only things on the table. The deal includes a potential additional spin-off series. Yes, you heard that right!

In the past, the theatrical adaptations from New Line Cinema and Director Peter Jackson, earned The Lord of the Rings camp a combined gross of nearly $6 billion worldwide, not to forget the combined 17 Academy Awards which the trilogy garnered overtime.

The game is on 

In April, it was reported that to fight off competitors, Amazon was all set to spend $4.5 billion on video in 2017, according to analysts at JP Morgan.

But that is still short of the gargantuan $6 billion content budget which Netflix seems to have set for 2017. Even Apple has stated a $1 billion investment in 2018 for video content to get into the groove.

Content budgets over the year for Netflix and Amazon (Source: Business Insider & Statista)


It’s no secret that this push for video content has costed Netflix a debt of $20 billion.

But investors are optimistic the major investments will now lead to exponential returns down the line.

Global streaming giant Netflix today boasts of 104 million subscribers worldwide, up 25 percent from last year and almost quadruple from five years ago.

According to Los Angeles Times, its series and movies account for more than a third of all prime-time download internet traffic in North America. Its more than 50 original shows garnered 91 Emmy Award nominations this year, second only to premium cable service HBO.

While not worldwide, a study by Consumer Intelligence Research Partners states that Amazon Prime Members hit 90 million in the US. This accounts for 63 percent of Amazon’s customers in the US.

(Source: Statista)

Moreover, Prime members spend close to $1,300 on an average per year.

But what needs to be highlighted is the approach of these platforms from just aggregators to full stack production houses.

Netflix has shows like House of Cards, Stranger Things, 13 Reasons Why, and The Crown becoming cultural sensations. But Amazon seems to be scouting for its knight in armour, which seems to have arrived in the form of LOTR.

The war has also expanded to India with both the content powerhouses scouting for ‘Originals’ specific to Indian audiences.

Whatever it might be, one can rest assured that the biggest gainer of these strategies is finally the consumer.

Grabs popcorn.