As we’ve already seen, in the early 2000s, the transformation from physical media to digital media posed an existential threat to Amazon’s business. Roughly 75 percent of Amazon’s business at that time consisted of selling physical books, CDs, and DVDs to customers. We had to invent or risk becoming an irrelevant has-been in media sales. Also, while hugely successful, Amazon Prime was essentially an extension (albeit a very large one) of our existing online physical media retail business.
