Amazon CEO Bezos in shareholder letter: Authors are our customers, too

Amazon (s AMZN) released its 2012 annual report (PDF) Friday, and as usual it is accompanied by a letter to shareholders (PDF) from CEO Jeff Bezos. The letter focuses on the things that Amazon does to “improve our services, adding benefits and features, before we have to.” A few tidbits:

  • “Prime Instant Video selection tripled in just over a year to more than 38,000 movies and TV episodes.” Amazon got streaming exclusives this year on shows like Downton AbbeyJustified and Under the Dome (which it will be streaming in-season).
  • The Kindle Owners’ Lending Library now contains over 300,000 ebooks, nearly all of them self-published, though Bezos notes the company’s “investment of millions of dollars to make the entire Harry Potter series available as part of that selection.” (At the time of that deal, Pottermore CEO Charlie Redmayne said that the deal was large enough that any lost sales were “more than made up for.”)
  • The authors that Amazon Publishing works with are customers, too. Amazon recently announced that it will start paying the authors in its publishing imprints royalties every 60 days (KDP authors are already paid that frequently). “The industry standard is twice a year, and that has been the standard for a long time. Yet when we interview authors as customers, infrequent payment is a major dissatisfier. Imagine how you’d like it if you were paid twice a year. There isn’t competitive pressure to pay authors more than once every six months, but we’re proactively doing so.”
  • Amazon Web Services is “a very clear example of internally driven motivation…we’ve reduced AWS prices 27 times since launching 7 years ago,” and with its Trusted Advisor monitoring tool “we are actively telling customers where they’re paying us more than they need to.”
  • Bezos mentions an “industry observer” who, as Peter Kafka at AllThingsD points out, is actually Business Insider CEO Henry Blodget. Bezos recently led a $5 million round of investment in Business Insider.
  • Another reminder to investors who fear Amazon’s “Our business approach is to sell premium hardware at roughly breakeven prices….We don’t need our customers to be on the upgrade treadmill.”

As previously reported, Amazon’s revenues in 2012 were $61.09 billion, up 27 percent from 2011. Operating income fell to $676 million, from $862 million in 2011, and the company saw a net loss of $39 million, compared to net income of $631 million in 2011. Amazon is set to release its earnings for the first quarter of 2013 on April 25.