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SECTOR FOCUS Digital media: Amazon takes on a new role

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No longer simply an online marketplace, Amazon is now made up of a multitude of businesses. The company’s ongoing concerns now span cloud storage, movie production, pharmacies in the US, video streaming and groceries.

Initially, the company’s only involvement in media revolved around selling CDs, DVDs and peripherals on its marketplace site. Now, while still doing all that, the company is also involved in creating media – and devices to consumer it on – and has successfully merged media and retail in its Prime offering.

In fact, as of 2020, around 56% of Amazon’s $386bn in total sales came from products sold online, the rest was made up of tech services and media sales.

Amazon has three main roles in media: its content streaming service, Prime, and its Kindle eBook offering. It also runs Amazon Music, a music streaming service, that in 2022 became the second largest music service in the US with 52.6 million users, ahead of Apple’s 38.2 million, but behind Spotify’s 93.4 million US users.

Its Kindle offering – which encompasses selling Kindle eBook reader devices, as well as ebooks and magazines to read on them – accounts for 72% of the ereader device market, some 12 million devices in 2020. Amazon doesn’t release figures on subscriber numbers, but there are some 6 million books available for download and around 1 million are added each year.

The third media string to Amazon’s bow is Prime Video. This subscription VOD service offers users the ability to rent and buy content, as well as accessing some free content, all as part of their Amazon Prime subscription – which also lets them access rapid delivery and other perks when shopping on the main Amazon marketplace. Globally there are around 200 million Amazon Prime subscribers, all of them with access to Prime Video. 

The company has further cemented its place in the media content landscape with the $8.5bn purchase of legendary MGM Studios in Hollywood, adding content creation to its impressive roster of businesses.

Read more in the RetailX Digital Media Sector report

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