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DVD Helps Amazon Up Q1 Profit Substantially

24 Apr, 2007 By: Erik Gruenwedel

A 21% increase in packaged media sales, which included movie DVDs and video games and software, helped Amazon.com Inc. post first-quarter (ended March 31) income of $111 million, compared to $51 million during the same period last year.

North American packaged-media revenue topped $990 million, compared to $815 million last year. International packaged media sales increased 24% (31% when not factoring in changes in exchange rates) to $1 billion, compared to $763 million last year.

Revenues for consumer electronics and assorted general merchandise skyrocketed 51% to $564 million from $374 million last year. Overseas, revenues increased 34% (including changes in exchange rates) to $383 million, compared to $265 million last year.

Total revenue for the quarter topped $3 billion, or 32% more than $2.28 billion last year.

During an analyst call, Amazon executives attributed some of the international revenue gains across all segments to sales increases by third-party merchants.

In the United States, launch of Amazon Prime, the online retailer's $79 annual loyalty program that grants members free unlimited two-day express shipping on more than 1 million products, helped boost North American revenues, said company executives.

When asked if Amazon was adding content to its broadband-enabled Unbox download service, CEO Jeff Bezos said the company continued to be in the process of adding content selection.

“We just recently added the National Hockey League, and you can expect us to continue to go down that path,” said Bezos. “It is certainly something that is a core brand attribute for Amazon.”

He declined to comment whether there had been an uptake in subscribers to the company's recently announced Unbox service with digital video recording pioneer TiVo.

Regarding rollout of a subscription model for movie downloads, both Bezos and CFO Tom Szkutak declined comment, adding they would wait to see how the market developed.

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