Amazon reports Q2 “other” category revenue, which mostly covers its ad business, of $4.22B, up 41% YoY, and subscriptions services revenue of $6.02B, up 29% YoY
Emil Protalinski / VentureBeat :
Context & Ripple Effects
This is the fourth straight quarter Amazon has broken out these two lines, and they now read as a series rather than a curiosity: Q1's $3.9B in "other" revenue, up 44% YoY was the first pandemic-quarter print, and Q2 holds that pace at 41% even as brand budgets contracted elsewhere. Subscription revenue, meanwhile, has climbed steadily from $5B in late 2019 through $5.56B in Q1 to $6.02B now, with YoY growth holding near 28-34% throughout.
The reason analysts watch these two buckets is margin: both are far more profitable than first-party retail, and together they are approaching $10.2B per quarter — roughly a fifth again the size of the entire business by revenue when Amazon last broke out differently. The next print, Q3's $5.4B, up 51% YoY, would confirm the acceleration wasn't a one-off.
First-order effects
- Advertisers are buying Amazon's ad inventory at an accelerating rate during a recession quarter, making the "other" line one of the few places where marketing spend demonstrably did not pull back.
Second-order effects
- Every point of share Amazon takes comes from search and social budgets concentrated at Google and Facebook, forcing both to defend against a rival whose ad product is bundled with purchase intent and Prime membership rather than sold standalone.
- Prime's 29% subscription growth compounds the ad advantage: each new subscriber deepens the shopping data pool and the captive audience that makes the ad inventory valuable.
Third-order effects
- If the pattern in this quarterly series holds — ad growth consistently outpacing subscription growth, which itself outpaces retail — Amazon's profit mix shifts structurally toward advertising, turning what began as a footnote disclosure into a core pillar of how the market values the company.
- Retail media hardens into a recognized third pillar of digital advertising alongside search and social, with every large retailer eventually forced to replicate the model Amazon proved out.
The trend: Amazon's high-margin ad and subscription lines are compounding fast enough across consecutive quarters to shift the company's economic center of gravity away from low-margin retail.