Media Sales Soar at Amazon

by Jim Milliot, PW Daily -- Publishers Weekly, 4/25/2007

Led by a 33% increase in international media group sales, total media sales jumped 26% in Amazon’s first quarter, to just under $2 billion. The increase was the fastest growth in the media segment, home to the e-tailer’s book segment, in three years. Sales in Amazon’s North America media group rose 21% in the first quarter, to $990 million. Preorders for Harry Potter and the Deathly Hallows, now at 575,495, had only a small impact on first-quarter numbers.

The strong media group performance was just one part of a stellar first period for Amazon. Total revenue at the e-tailer rose 33%, to $3.02 billion and, more importantly to analysts, operating income jumped 38%, to $145 million. Analysts have been concerned about Amazon’s slim margins, but the big gain in earnings mollified critics, at least for the moment.

In addition to adding more categories and countries, Amazon attributed the strong company performance to a significant increase in the number of customers using Amazon Prime, its membership program which offers discounts on shipping to members. Margins were also helped by an increase in third-party sellers, especially overseas.