paidContent 50: The world’s most successful digital media companies

21. Amazon

Books, United States (Public)

Last year’s rank: N/A

Digital Content Revenue

$1,850,000,000 (3% of total)


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Digital Snapshot

Amazon is strengthening its place as the best-situated retailer in a growing markets, e-books, by owning both the platform (Kindle) and the distribution (store). But it is also trying to become a provider of all kinds of content, through MP3, Video and more.

Key Move

Amazon released the Kindle Fire tablet and continues to expand digital content offerings for Prime members, including Prime Instant Video and Kindle Owners’ Lending Library.

Our Methodology

Amazon’s global physical and digital “media” (i.e., content) sales in 2011 were $17.78 billion, according to Amazon. The company doesn’t break out digital content sales, and analyst Ben Schacter at Macquarie calls this kind of estimate “impossible.” Nevertheless, Barclays took a stab, estimating that Amazon’s 2011 digital content revenue (defined as content sold on Kindle e-readers, Kindle Fire and non-Amazon devices, not including apps, video, etc) was between 7.5% and 11% of total global media sales. Using 10%, that would be $1.78 billion.

Here’s another way to look at it: We know that Barnes & Noble, which has roughly a 25% share of the U.S. e-book market, sold $463 million worth of digital content (apps, e-books, digital newsstand) for the year ending April 28, 2012. Amazon has roughly 60 percent of the U.S. e-book market and, unlike Barnes & Noble, also sells videos and music and operates internationally. S,o using B&N’s figure as a gauge, we could estimate that Amazon’s digital content was between three and five times higher than Barnes & Noble’s. Three times higher is $1.39 billion; four times higher is $1.85 billion; five times higher is $2.3 billion. We used the middle estimate ($1.85 billion.)

This estimate doesn’t include any revenue from Amazon Prime, which includes some free content for members who pay $79 a year for expedited shipping.

Source: Our estimate, Barclays estimate.

— Laura Owen