Amazon surprised even their most devoted supporters Thursday with the release of their first quarter earnings report which showed the company performing far and above anyone’s expectations.
The company reported stunning Q1 revenues, surging 44% to $108.5 Billion and EPS of $15.79 surpassing even their own projections and proving that the book seller turned online retail giant isn’t going anywhere anytime soon.
Amazon Benefits from Pandemic
2020 was the year of the “stay at home stock” as investors all over the globe saw stocks like Zoom and Apple shoot up as they continued to offer devices and services that helped ease the work from home environment most were calling their new norm. Unlike its many brick and mortar competitors, Amazon already had its grip firmly on the online sector and was able to take full advantage of this situation.
It’s no secret that Amazon has been steadily growing for over a decade now but many attributes their recent growth to the simple fact that the world has been shut down for over a year, requiring most to do their shopping (whether that be daily, seasonal, and/or special occasion) online.
With the pandemic forcing the hand of shoppers to the online sector, even those who may have not been regular Amazon customers soon found the ease of clicking a mouse much more enticing than standing in line at a regular store.
Now, with the pandemic coming to an end and the world slowly venturing back into their regular routines, the question remains whether or not Amazon will be able to hold onto these newly acquired customers or if they will continue with their brick-and-mortar support.
By the look of Thursday’s reports, it appears Amazon may just have another victory on their hands.
Amazon Prime
Adding to the fact that Amazon is the world’s largest online retailer, the company’s ability to diversify with recent steps into streaming services only helps solidify their standing as one of the largest and most powerful companies on the globe.
With online streaming services sprouting up like weeds lately, it’s no surprise that a major player like Amazon would want to get a piece of the action.
With their Amazon Prime streaming service, Amazon has been able to rake in even more customers with a reported 175 million members in the past year and streaming hours up more than 70% year-over-year.
And with the creation of a streaming service comes the ability to produce your own content, which is exactly what Amazon and competing services like HBO MAX and Netflix are doing (Read our recent article on Netflix by CLICKING HERE…)
In fact, Amazon was able to rake in 12 Academy Award nominations for their original Prime content alone!
One area Amazon may suffer in the streaming war, however, is the lack of back catalogue programming to fill their library. While Amazon did recently announce that Prime will become the exclusive home for Thursday Night Football in 2023, streaming services offered through the Big 4 networks of ABC, CBS, NBC, and FOX all have years of past programming that they can pull from to entice viewers to subscribe…
- Want to watch an episode of Frasier or Seinfeld, you’ve got to go with the NBC Peacock streaming platform.
- Interested in binging episodes of LOST or Grey’s Anatomy? You’ll need to subscribe to ABC’splatform.
And let’s not forget the house of mouse… With Disney recently pulling its content from now competitor Netflix to create their own streaming platform, (Disney Plus) subscribers now have one more bill to pay if they want to see what Donald Duck is up to.
There really isn’t any “one stop shop” anymore for streaming content… The days of networks licensing out their programming to the likes of Netflix or Hulu are slowly fading away. And with major players like Disney and Comcast at the forefront of the streaming war, Amazon officials knows it’s anyone’s ballgame.
The Wrap Up…
Amazon may not be the strongest contender in the battle for streaming dominance, but they certainly aren’t the weakest either. And their ability to diversify has been a very strong asset for the company.
With the recent release of their Q1 earnings reports stunning the world, it appears Amazon’s steps into streaming are only going to make this online giant a little bit taller.
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