Amazon Posts Profit23 Apr, 2009 By: Chris Tribbey
Bucking the trends of a deep economic recession, online retailer Amazon April 23 reported a 24% year-over-year increase in its first quarter profits, which tallied $177 million, compared to $143 million in 2008.
Sales increased 18% during the quarter (ended March 31) to $4.89 billion. Sales in Amazon’s media category, which includes DVD and Blu-ray Disc sales, jumped 8% to $1.3 billion. Worldwide sales of electronics, which includes the new Kindle electronic book device, and general merchandise grew 38% to just over $2 billion.
Amazon CEO and founder Jeff Bezos said the company’s media and electronics sales were up due to a wider selection of products. He also spoke about Amazon Video on Demand, which launched in September.
“The strategy is very simple,” Bezos said during a conference call with investors. “To increase the customer experience of video on demand relentlessly. Today you can use Amazon video on demand seamlessly on Tivo and the Roku box.”
The service also allows users to instantly stream content on PCs or Mac computers, portable media players and Sony Bravia HDTVs that are Internet-ready. Bezos said the $2-$4 rental prices and $10-$15 sellthrough options would continue, with no subscription offering in the works.
“The amount of selection you have on a subscription model is much less than what you can get on the a la carte model,” Bezos said.
Bezos did not discuss VOD revenue.