To our shareowners:
As regular readers of this letter will know, our energy at Amazon comes from the desire to impress
customers rather than the zeal to best competitors. We don’t take a view on which of these approaches is more
likely to maximize business success. There are pros and cons to both and many examples of highly successful
competitor-focused companies. We do work to pay attention to competitors and be inspired by them, but it is a
fact that the customer-centric way is at this point a defining element of our culture.
One advantage – perhaps a somewhat subtle one – of a customer-driven focus is that it aids a certain type of
proactivity. When we’re at our best, we don’t wait for external pressures. We are internally driven to improve
our services, adding benefits and features, before we have to. We lower prices and increase value for customers
before we have to. We invent before we have to. These investments are motivated by customer focus rather than
by reaction to competition. We think this approach earns more trust with customers and drives rapid
improvements in customer experience – importantly – even in those areas where we are already the leader.
“Thank you. Every time I see that white paper on the front page of Amazon, I know that I’m about to get
more for my money than I thought I would. I signed up for Prime for the shipping, yet now I get movies, and TV
and books. You keep adding more, but not charging more. So thanks again for the additions.” We now have more
than 15 million items in Prime, up 15x since we launched in 2005. Prime Instant Video selection tripled in just
over a year to more than 38,000 movies and TV episodes. The Kindle Owners’ Lending Library has also more
than tripled to over 300,000 books, including an investment of millions of dollars to make the entire Harry Potter
series available as part of that selection. We didn’t “have to” make these improvements in Prime. We did so
proactively. A related...