Amazon smashed Wall Street expectations in its Q3 earnings report, delivering $143.1 billion in total revenue, and net income of $9.9 billion.
But of particular note to the entertainment industry, Amazon says that its advertising business continues to be a major revenue driver, topping $12 billion in the quarter, up 26% from a year ago. Amazon’s ad business includes Freevee and Thursday Night Football, among other programming, and it will be bringing ads to the core Prime Video service early next year.
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The ad business also includes ads for products that are sold through the Amazon marketplace, which make up the bulk of that business line.
The company also highlighted its work in the generative AI space, a hot topic among all tech companies this earnings season.
Amazon follows Google owner Alphabet, Facebook and Instagram owner Meta, and Snap in having a blowout quarter that beat Wall Street forecasts. While the digital advertising market seems strong, the market for ads from traditional entertainment companies still appears tough.
“We had a strong third quarter as our cost to serve and speed of delivery in our Stores business took another step forward, our AWS growth continued to stabilize, our Advertising revenue grew robustly, and overall operating income and free cash flow rose significantly,” said Andy Jassy, Amazon’s CEO. “The AWS team continues to innovate and deliver at a rapid clip, particularly in generative AI, where the combination of our custom AI chips, Amazon Bedrock being the easiest and most flexible way to build and deploy generative AI applications, and our coding companion (CodeWhisperer) allowing enterprises to have the equivalent of an experienced engineer who understands all of their proprietary code is driving momentum with customers, including adidas, Booking.com, GoDaddy, LexisNexis, Merck, Royal Philips, and United Airlines, all of whom are starting to run generative AI workloads on AWS.”
Amazon, of course, is a behemoth, with its online retail business joining AWS as core parts of the company, joined by Prime, which includes its video and entertainment divisions.
In the earnings report, Amazon specifically called out the hot start for its NFL Thursday Night Football coverage (ratings up 25% from a year ago) as well as The Summer I Turned Pretty, and new launches for Prime Video Channels in overseas markets.
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