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Amazon Ups Q1 Media Revenue 8%

28 Apr, 2016 By: Erik Gruenwedel

E-commerce giant looking to significantly increase Prime Video content spending this year

Amazon April 28 said first-quarter (ended March 31) North America media sales increased 8% to $3.2 billion, from $2.96 billion during the previous-year period. Media sales include books, music, movies (DVD/Blu-ray Disc), video games and consoles, software and digital downloads, including Amazon Instant Video.

International media sales increased 7% to $2.48 billion, from $2.32 billion. The international sales growth rate was the strongest in nearly four years.

“I would attribute it to the Prime flywheel effect,” CFO Brian Olsavsky said on the company's fiscal call, adding that Prime subscriptions were up more than 50% last year, which included a higher-percentage growth rate overseas.

Amazon announced its $39 Fire TV Stick became the first product ever to exceed 100,000 customer reviews, including over 62,000 five-star reviews — more than any other product ever sold on Amazon.

Olsavsky said Mazon would significantly increase content spending on originals over the next few quarters.

“We think that’s working. It’s important to bring a lot of new content to our Prime subscriber,” he said.

The CFO said the new monthly Prime membership (separate from Prime Video) is an attempt to avoid saturation and provide flexibility to consumers in a low-cost way.

“It’s a hurdle for many people to put up a full-year’s [$98] payment. Annual [payment] is still going to be a better deal, but we feel customers may try [Prime] more frequently with the monthly plan,” Olsavsky said.

About the Author: Erik Gruenwedel

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