When Amazon pursued the rights to a Lord of the Rings series in 2017, the company knew it would have to overcome some major hurdles to lure JRR Tolkien's legacy to its video streaming platform.

Amazon was a relative newcomer to video, with no track record of helming a blockbuster series. HBO, meanwhile, had a long history of hits, most notably “Game of Thrones,” a similarly epic fantasy series with a rabid fan base. Netflix, with more than 100 million subscribers, pioneered the on-demand model with hits like “House of Cards” and “Orange is the New Black.”

And, not to mention, Apple was also involved in negotiations to acquire the rights to the upcoming TV show, according to insiders.

Amazon didn’t have a lot of Hollywood cred. What it did have was the richest person on the planet in CEO Jeff Bezos, a huge “Lord of the Rings” fan who promised the Amazon Studios team a huge budget to acquire the series, a prequel to Tolkien’s “The Fellowship of the Ring.”

But money alone wouldn’t separate Amazon from the rest — Amazon’s $250 million bid wasn’t even the highest for the show’s rights, according to a person familiar with the matter. The ultimate selling point, according to people with knowledge of the negotiations, involved Amazon’s original business from more than two decades ago: books.

The Tolkien estate was confident that Amazon could sell truckloads of Tolkien fantasy novels, including “The Hobbit” and “The Silmarillion,” as well as “The Lord of the Rings,” in promoting the series. In meetings with the Tolkien estate and publisher HarperCollins, Amazon’s Sharon Tal Yguado, hired from Fox in 2017, demonstrated a near-encyclopedic knowledge of Tolkien’s characters, stories and geography, said the people, who spoke on condition of anonymity because the conversations were private.

Amazon’s ability to tie content to commerce convinced the Tolkien estate. But to make sure, to seal the deal, Amazon sent representatives from the Tolkien estate and his law firm, Greenberg Glusker, several crates of brand-new Amazon Echo speakers. Tolkien’s people were flattered, though they also joked that Amazon had provided the home assistants to eavesdrop on the negotiations, two of the people said.

Production on the “Lord of the Rings” series will begin in the next two years.

The massive investment in a TV series has Hollywood wondering how much Bezos will spend on content. So far, Amazon has spanned the TV spectrum, with original content like “Lord of the Rings,” a growing catalog of movies and shows, and live sports from the National Football League and Premier League. Just last month, Bezos was spotted chatting with NFL Commissioner Roger Goodell at the Super Bowl, a reminder that Amazon has several opportunities in the coming years to make a big splash in America’s most lucrative sport. Meanwhile, The New York Post reported Thursday that Amazon is close to closing a $3.5 billion deal to acquire the YES Network, the New York regional sports network that airs Yankees games.

» Subscribe to CNBC: http://cnb.cx/SubscribeCNBC

About CNBC: From "Wall Street" to "Main Street" to award-winning original documentaries and reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive videos and more.

Connect to CNBC News Online
Get the latest news: http://www.cnbc.com/
Follow CNBC on LinkedIn: https://cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: http://cnb.cx/LikeCNBC
Follow CNBC News on Twitter: http://cnb.cx/FollowCNBC
Follow CNBC News on Google+: http://cnb.cx/PlusCNBC
Follow CNBC News on Instagram: http://cnb.cx/InstagramCNBC

#CNBC
#Amazon
#PrimeVideo

Why Amazon is Following Netflix

Please feel free to share this video with your friends and family if you found it useful.