Amazon Posts A Loss On $16 Billion In Revenue
Trying to keep up with the free-spending Netflix is proving to be costly to Amazon. Despite posting $15.7 billion in revenue during the second quarter, it wound up with a surprising loss of $7 million, it said in an SEC filing on Thursday. It also reported a loss during the third quarter of 2012. It's phenomenal that a company that can report nearly $16 billion in revenue can show a loss, Needham & Co. analyst Kerry Rice told today's (Friday) Wall Street Journal. Content costs are certainly one area that they are spending more on. The Journal noted that under pressure from Netflix, Amazon has been striking costly deals to stream movies and TV shows via its Amazon Prime subscription program. Amazon CFO Tom Szkutak said during a conference call that the company's sales of digital products are outpacing those of physical items. He added that the company is revving up video content. CNN, citing figures from NPD Group, noted on Thursday that currently Netflix accounts for 89 percent of all subscription-based video streams, while Amazon Prime accounts for just 2 percent.