Amazon says unit sales of print books grew by “double digits” in Q4 compared to last year. That “is impressive given the shift to Kindle,” said CFO Tom Szkutak in the investor call following this afternoon’s disappointing earnings report.
The growth in Amazon’s print sales could be attributed to Borders’ liquidation in 2011. Szkutak did not say whether the company’s print book revenues increased.
During the call, several analysts expressed concern that North American media sales grew relatively slowly during the quarter—they were up just 8 percent, to $2.56 billion, for Q4, despite the release of the Kindle Fire and new Kindle e-readers. (North American media sales grew 12.9 percent in Q4 2010.)
Szkutak sought to downplay those concerns, repeatedly attributing the slow growth to a decline in video game revenues year-on-year. “That’s impacting the North American media number, particularly versus Q4 last year,” he said—though he said at another point that the company “usually” sees declines in video game revenues in Q4 so it was unclear why things were worse this year.
In response to Goldman Sachs analyst Heather Bellini’s question on whether Kindle Fire sales are cannibalizing sales of Kindle e-ink readers, Szkutak said “both did very well and we’re very pleased with the growth we’re seeing there.”
As for Kindle Fire customers’ conversions to Amazon Prime (they get a 30-day free trial automatically with the purchase of the device), as well as Prime customers’ profitability in general, Szkutak said it’s too early to tell but, as usual, “we like what we’re seeing.” Amazon is committed to “adding more content to Prime and making Prime better,” he said. “We think it is very good for customers and very good for shareowners….From what we see so far, it supports continued strong investment, so that’s what we’re doing.” He promised “over time we’ll be sharing more.”
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