Amazon reports Q2 “other” category revenue, which mostly covers its ad business, of $7.9B, up 83% YoY, and subscription services revenue of $7.9B, up 28% YoY
Jill Goldsmith / Deadline :
Context & Ripple Effects
Amazon’s ad-linked “other” revenue had already climbed from $3.9B in Q1 2020 to $4.22B in the prior-year Q2, while subscription services remained the larger reported line. This quarter brings the two categories to the same reported revenue level, with “other” growing far faster.
The pattern continued into the subsequent Q3 report, when both lines again exceeded $8B, suggesting Amazon was building two sizable non-retail revenue streams rather than relying on subscriptions alone.
First-order effects
- Amazon’s ad-linked “other” category reaches $7.9B, matching subscription-services revenue in dollar terms while growing at 83% year over year versus subscriptions’ 28%.
- Amazon’s reported revenue mix gains a faster-growing counterweight to subscription services, making the “other” segment materially more consequential in its quarterly results.
Second-order effects
- The widening growth gap shifts more of Amazon’s incremental non-retail revenue toward its ad-linked “other” category than toward subscriptions.
- Investors can more clearly evaluate whether Amazon’s subscription growth is being supplemented by, rather than matched by, the expansion of its ad business.
Third-order effects
- If the two lines continue to grow at materially different rates, Amazon’s recurring-revenue profile will become increasingly shaped by advertising alongside subscriptions rather than by subscriptions alone.
The trend: Amazon is developing advertising and subscriptions into parallel large-scale revenue lines, with ad-linked revenue growing faster in the reported period.