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Amazon: Prime Members’ Digital Media Usage More Than Doubled in 2016

Internet retailing giant Amazon touted strong results of its Prime membership program — saying user consumption of video, music and book content in 2016 more than doubled — but the company, as is typical, didn’t provide specific metrics beyond that.

Amazon reported the media-consumption stat in announcing four-quarter 2016 results. Net sales in the holiday quarter were well short of Wall Street expectations of revenue of $44.68 billion, coming in at were $43.74 billion (up 22% from the year-earlier period). Net income was $749 million in the fourth quarter, or $1.54 per diluted share, beating analyst forecasts of adjusted EPS of $1.40. It’s Amazon’s seventh consecutive quarter posting a profit, after years of losses.

According to Amazon founder and CEO Jeff Bezos, the company added “tens of millions” of new paid Prime members last year. But the company has never disclosed how many Prime members it has.

In the U.S., Prime membership costs $99 per year. The program is anchored around free two-day shipping on many products, and includes unlimited access to Prime Video, including Amazon Studios original series and movies.

“Our Prime team’s customer obsession kept them busy in 2016,” Bezos said in announcing the results. He noted that last quarter, Amazon launched Prime Video in 200 countries and territories — making it the only real global competitor to Netflix. Prime Video is now automatically available at no additional cost to Amazon Prime members in Belgium, Canada, France, India, Italy, and Spain, in addition to its previous markets of the U.S., U.K., Germany, Austria and Japan.

CFO Brian Olsavsky, on a call with analysts Thursday, said the global launch of Prime Video in Q4 was an important step to getting better return on its investment in original productions. Previously he had said Amazon’s spending on video content would double in the second half of 2016 versus the year prior. “It’s very much a fixed-expense base… and the ability to amortize that over a large population is what we’re looking for,” he said.

The company called out Amazon Studios in the earnings announcement, noting that its drama “Manchester by the Sea” was nominated for seven 2017 Academy Awards, including best picture — a first for a streaming service — as well as noms for director Kenneth Lonergan, and actors Casey Affleck, Michelle Williams and Lucas Hedges.

In addition, “The Salesman” from Iranian director Asghar Farhadi (to which Amazon acquired U.S. rights) garnered an Oscar nod for best foreign language film. However, Trump’s travel ban on seven Muslim countries including Iran has led Farhadi to decide that he will skip the awards ceremony.

Meanwhile, Amazon Studios was nominated for 11 Golden Globes this year, and received two: Casey Affleck won for his turn in “Manchester by the Sea” and Billy Bob Thornton took home a trophy for his role in legal drama series “Goliath.”

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