Shares in Amazon were up 12 per cent in after hours trading on Thursday after the company reported first quarter profit of $513 million.
This marked Amazon's fourth straight quarter of profits and was a significant improvement on the same quarter of the previous year, when Amazon reported a loss of $57 million.
Amazon plans to spend the money on video, chief investment officer Brian Olsavsky said in a call to investors when the results were announced. He said Amazon sees more people subscribe to Prime once they start using the video service.
“One of the larger investments is our content spend. We like the results because we see better engagements, better free trial conversions from Prime members who use the video service,” Olsavsky said. “We're going to significantly increase our content spend."
That could take Amazon head to head with Netflix as it seeks to expand on an award-winning range of original TV series. Original TV series Transparent and Mozart in the Jungle have already won Amazon Golden Globes, but there are signs that it wants to do more original content, which could pit it head to head with Netflix.
In April, Amazon made its video service available to non-Prime members who can now pay for the service month-by-month - just like Netflix - rather than as part of the $99-a-year Prime membership.
Sales were up 28 per cent to $29.1 billion in the first quarter. Amazon said that sales of Kindle and Fire tablets were its best-selling items.
“Amazon devices are the top selling products on Amazon, and customers purchased more than twice as many Fire tablets than first quarter last year,” said Jeff Bezos, chief executive.
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