Amazon Prime sign ups help its revenues surge 22%

Amazon's moves into the content creation space have helped spur its success, says co-founder and CEO Jeff Bezos

Amazon sales have rocketed year over year by 22% to hit $43.7bn during the final quarter of 2016, with net sales income for the full year also experiencing a remarkable increase hitting $136bn, with chief executive Jeff Bezos crediting the success to its Amazon Prime offering.

“Prime members can now choose from over 50 million items with free two-day shipping — up 73% since 2015. Prime Video is now available in more than 200 countries and territories. Prime Now added 18 new cities, which means millions more members now get one and two hour delivery,” he added in a statement on the company’s investor relations website.

“New benefits were also added to the list, like Prime Reading, Audible Channels for Prime, Twitch Prime and more. And customers noticed — tens of millions of new paid members joined the program in just this past year.”

Other highlights the retail giant, and increasingly content creator, highlighted in the release include its widely lauded moves to fund and co-create content including: The Grand Tour, The Man in the High Castle, and Transparent.

Bezos was also quick to highlight how Alexa-enabled devices were the top-selling products across all categories on Amazon.com this holiday season. Customers purchased and gifted a record-setting number of devices from the Amazon Echo family with sales up over nine times the amount compared to 12 months earlier.

  • Amazon sold millions of Fire TV devices this holiday season
  • Third-party developers released more than 4,000 new Alexa Skills since October, including ADT, AT&T, CBS, Pizza Hut, and The Wall Street Journal. Tens of thousands of developers are building skills for Alexa
  • Tens of thousands of developers are using the Alexa Voice Service to integrate Alexa into their products, including Dish DVRs, Ford and Volkswagen vehicles, GE C Lamp, Huawei Mate 9, LG Smart Instaview fridge, and Whirlpool appliances
  • Amazon Prime Air, the service that uses drones to safely deliver packages to customers in 30 minutes or less, made its first delivery in December. The delivery marks the start of a limited, private trial for customers in a select area of the UK

The release also contained some forward-looking statements including how net sales were forecast to range between $33.25bn and $35.75bn, or to grow between 14% and 23% compared to 12 months earlier.

However it did note that unfavorable foreign exchange rates meant that income is expected to be between $250m and $900m during the forthcoming quarter. This is compared with $1.1bn 12 months earlier.

Amazon’s leadership are scheduled to give a more in depth insight to its performance over the last quarter, plus guidance on its priorities in the coming period in an earnings call later today.

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Sean Larkin

All by Sean