“We are very excited. Prime is growing very fast,” CFO Tom Szkutak said in the analyst call following the earnings report. Amazon Prime members pay $79 a year for unlimited two-day shipping and other benefits, including access to Amazon’s Netflix competitor Prime Instant Video, a streaming video library with about 40,000 movies and TV show episodes.

Prime Instant Video is “certainly helping the Prime membership increases that you’re seeing,” Szkutak said, citing “great usage.” We think it’s interesting” — Szkutak described nearly every service that analysts asked about as “interesting” — “and we are investing there.” The company’s Q4 guidance includes the costs of acquiring more content, as well as developing original content. “We’re very excited about that opportunity,” he said.

Once Prime members sign up, they tend to stick around: “We’ve seen not only a very strong increase in Prime membership, but we’ve seen very good retention of Prime members. When you look at that in terms of lifetime value, we have a customer base that’s staying with us longer [and] doing more cross-shopping.”

This apparently extends to Amazon’s grocery delivery service, AmazonFresh, which is only available in LA and Seattle for now. “Are you selling more general merchandise as a result of more frequent deliveries in [those] markets?” one analyst asked. “Yes,” said Szkutak.

As for non-Prime members, well, this week Amazon raised the minimum for its Free Super Saver Shipping from $25 to $35. Due to more eligible items and higher fuel and transportation costs, it “seemed like the right thing to do,” according to Szkutak.

Overall, earnings followed the pattern we generally see at Amazon — high revenues, low or no profits. The company pulled in $17.09 billion in revenue during the quarter, up 24 percent over this time last year and beating analysts’ expectations. It saw a loss of $41 million for the quarter, or $0.09 per share. The results sent Amazon’s stock soaring nearly 30 percent in after-hours trading, to nearly $360 — an all-time record.

For Q4, Amazon expects revenues between $23.5 billion and $26.5 billion, with the range for operating income or loss ranging all the way from -$500 million to $500 million.

The company previously announced similar deals for PBS’s Downton Abbey and the CBS Stephen King summer series Under the Dome. In the case of Under the Dome, Amazon will stream episodes four days after they air on CBS.

Prime Instant Video is also adding an older FX show, The Shield, but that’s not an exclusive – The Shield is also available through Hulu Plus.

Prime Instant Video already offered some CBS and Showtime series for streaming. Amazon also announced a deal earlier this week to stream episodes of CBS’s upcoming Stephen King drama Under the Dome this summer while the show is still on the air.

The kids’ pilots, along with the six comedy pilots, will be posted on Amazon Instant Video, Prime Instant Video, Lovefilm UK and Lovefilm Germany, where customers can watch them for free and help determine which go into production.

It’s all part of Amazon’s initiative to remove the middleman from streaming TV. The shows’ creators get $10,000 when their show is optioned and $55,000 if it’s chosen for production, as well as a share of licensing fees and other royalties. Amazon says it’s now optioned a total of 25 projects, and it’s looking for more children’s and comedy shows.

Here are the first five children’s pilots:

Creative Galaxy

Creative Galaxy is an animated interactive art adventure series, designed to inspire kids’ creative thinking through crafts, story, music and dance. The series was created by Angela Santomero, creator of Super Why!, the Emmy-nominated literacy series, Blue’s Clues and Daniel Tiger’s Neighborhood.

Oz Adventures

In this innovative problem solving series, Dot, Dorothy’s daughter, goes off to Oz everyday with the children of the beloved characters from L. Frank Baum’s classic book, The Wizard of Oz. In each episode, the yellow brick road leads Dot to a new magical location where she solves problems alongside her Oz friends.

Teeny Tiny Dogs

Produced by The Jim Henson Company (Sid the Science Kid, Dinosaur Train) and created by Howard Baker (Rugrats), Teeny Tiny Dogs follows Butch, Butterfly, Dinky and Polly as they help one another navigate the big world despite their teeny, tiny, small size. This series promotes happiness through friendship, learning, growing and developing a strong sense of self as seen through the eyes of canine friends.

Tumbleaf

Tumbleaf was created by Drew Hodges and Bix Pix Studios, an award-winning stop motion studio. The series, aimed at preschoolers, is set in a whimsical land where a small blue fox named Fig plays each day and discovers adventure, friendship and love around every bend in the path. Children will be enriched by narratives that promote play through exploration and cognitive reasoning.

The Untitled J.J. Johnson Project

The Untitled J.J. Johnson Project revolves around Anne, a young scientist, who creates three robot helpers to assist her scientific experiments in the back of her dad’s junkyard. This science-based series from creator J.J. Johnson (Dino Dan, This is Emily Yeung) aims to introduce kids to science and technology in a fun, new way.

If you’re not a Netflix subscriber, you may not yet know that issues at Amazon’s US-East data center facility took down Netflix’ streaming service on Christmas Eve — arguably the worst possible time. Starting at 1:50 p.m. PST, as GigaOM’s Janko Roettgers reported, Amazon’s US east facility reported issues with its Elastic Load Balancing service that carried over into Christmas morning.  Interestingly, Amazon Prime Instant Video streaming service, which competes head-on with Netflix and which also runs on AWS, appeared to be unaffected by the US East snafus.

Wait… AWS outage took Netflix offline, but Amazon video stayed up? What the huh?—
Rafe Needleman (@Rafe) December 25, 2012

Update 9:55 a.m. PST: One commenter from Mass. reported his Amazon Prime Instant Video was down for two days. I was able to access that service this morning with no problem. Stay tuned for updates on this.

The latest update to the AWS status page reads:

Dec 25, 4:36 AM PST We continue to work on resolving issues with the Elastic Load Balancing Service in the US-EAST-1 region. These issues are affecting updates to both existing and newly created ELBs. A subset of ELBs that made configuration changes or changes to registered instances during the event are experiencing errors or receiving reduced traffic. We continue to work toward a full recovery of the service. We apologize for the continued impact.

Other sites, including Heroku’s Platform as a Service, were also affected. Heroku, like Netflix, have been down this path before with previous AWS US East glitches.

Heroku, if you were a character on South Park, I would call you Kenny.Every time AWS has an episode you're killed. bit.ly/U7pu9w—
Brian McCallion (@BrianMcCallion) December 25, 2012

This, the latest of several problems at Amazon’s Ashburn, Virg. facility, highlights a couple big, recurring issues for Amazon, its partners, rivals, and customers.

1:  US-East is Amazon’s largest and oldest data center facility and perhaps not coincidentally it’s also the facility at ground zero of most of the AWS-related outages over the past few years. Still, many customers feel they have no choice but to deploy there since it’s usually the first AWS data center to host new services (For example, Amazon’s new high-storage instance types announced last week are only available from US-East for now.) And US-East tends to be less pricey than Amazon US-West facilities in California and Oregon.

2: Working with AWS now is a lot like a software company partnering with Microsoft in the 80s and 90s — it’s both your biggest partner and your biggest rival so tread carefully.  At AWS: Reinvent last month, Amazon CEO Jeff Bezos touched on this topic of “coopetition.”  Amazon Prime Instant Video competes with Netflix but “we bust our butts every day for Netflix,” Bezos said.

3: Issues like this one can only help AWS rivals in the OpenStack community — Rackspace, Hewlett-Packard et al that are trying to position their cloud services as options with better service and support, if not the same huge scale as AWS.  Partners might also take a harder look at other infrastructure providers like SoftLayer and Joyent. Just saying.

Update: At 8:45 a.m. PST Dec. 25: Netflix tweeted:

Special thanks to our awesome members for being patient. We’re back to normal streaming levels. We hope everyone has a great holiday.

— Netflix US (@netflix) December 25, 2012

Update: At 6:49 p.m.  PST Dec. 26, an AWS spokeswoman got back with a statement:

“On December 24, AWS experienced issues with the Elastic Load Balancing service that impacted some customers in the US-East region. Impacted customers started to recover the evening of December 24 and the service was fully recovered and functioning correctly on December 25.  We have been heads down ensuring customers are operating smoothly and will be publishing a full summary of the event in the coming days.

Amazon Instant Video wasn’t significantly impacted because it didn’t need to take any Amazon Elastic Load Balancing scaling events during the time there were issues with the Elastic Load Balancing service in US-East. Only Elastic Load Balancers that were scaling up or down had issues during that time period.”

In May, Amazon Studios invited developers to submit proposals for original children’s and comedy shows. The program is an effort to create original content while cutting out the middleman — big studios and networks. Creators get $10,000 if a show is optioned, and “a $55,000 payment, up to 5 percent of Amazon’s net receipts from toy and t-shirt licensing, and other royalties and bonuses” if a series is produced. In addition to the pilots announced today, Amazon previously optioned 14 other projects.

The pilots will be posted on Amazon Instant Video, where customers can watch them for free, and “viewer feedback will help determine which series Amazon Studios should produce. Completed seasons will be exclusively available to Prime members through Prime Instant Video and Lovefilm in the U.K. for free.”

Here are the six pilots:

Alpha House

Alpha House was written by Academy Award nominee and Pulitzer-Prize winner Garry Trudeau (Doonesbury, Tanner ’88). Alpha House follows four senators who live together in a rented house in Washington DC.

Browsers

Written by 12-time Emmy-winning comedy writer David Javerbaum (The Daily Show) and to be directed by Don Scardino (30 Rock), Browsers is a musical comedy set in contemporary Manhattan that follows four young people as they start their first jobs at a news website.

Dark Minions

Written by Big Bang Theory co-stars Kevin Sussman and John Ross Bowie, Dark Minions is an animated workplace series about two slackers just trying to make a paycheck working an intergalactic warship. The pilot will be produced by Principato-Young (Reno 911).

The Onion Presents: The News

The Onion Presents: The News is a smart, fast-paced scripted comedy set behind the scenes of The Onion News Network that shows just how far journalists will go to stay at the top of their game. The Onion Presents: The News is from The Onion’s Will Graham & Dan Mirk (The Onion News Network, The Onion Sportsdome).

Supanatural

Supanatural is an animated comedy series about two outspoken divas who are humanity’s last line of defense against the supernatural, when they’re not working at the mall. The series, written by Lily Sparks, Price Peterson and Ryan Sandoval, will be produced by Jason Micallef (Butter) and Kristen Schaal (The Daily Show).

Those Who Can’t

Written by Andrew Orvedahl, Adam Cayton-Holland and Benjamin Roy (Grawlix), who were discovered through Amazon Studios online open door process, Those Who Can’t is a comedy about three juvenile, misfit teachers who are just as immature, if not more so, than the students they teach.

Front-lit Kindle Touch

Since Barnes & Noble introduced the front-lit Nook with GlowLight in April, we’ve been waiting for a response from Amazon. The Verge has leaked images of the “Kindle Paperwhite,” which appears to be a front-lit Kindle Touch with a whiter, brighter and higher-resolution screen. The text on the images is in French and promises eight hours weeks of battery life even with the light on. It also looks as if Amazon has revamped the Kindle Store on the device, adding an option to see (and possibly download) the ebooks you’ve stored in the cloud.

Kindle Fire with camera and mapping

Also at The Verge are a couple pictures of a Kindle Fire with what appears to be a front-facing camera (the old Kindle Fire has no camera) and video chat.

Reuters reports the new Kindle Fire will also have mapping capabilities, citing unidentified sources: “Amazon will also add location capabilities to the new Kindle Fire, which requires either a GPS chip or a process known as Wi-Fi triangulation.” As my colleague Ki Mae Heussner reported in July, Amazon bought 3D mapping startup UpNext; Reuters says Nokia is providing the mapping technology.

New content deals for Amazon Prime Instant Video

In an effort to compete with Netflix and HBO Go, Amazon is actively building its free streaming video offerings, which are free to Amazon Prime members (who pay $79 a year for unlimited two-day shipping and other perks). The company recently signed a deal with NBCUniversal for shows like “Parks and Recreation” and “Battlestar Galactica,” bringing the total number of movies and TV episodes it offers to over 22,000. And it launched an instant video iPad app in early August.

The press conference’s Los Angeles location could suggest new movie or TV partnerships, and the NYT‘s  David Pogue said in this week’s column that “an imminent Amazon deal will bring thousands more movies to its catalog, I hear.”

The deal brings “thousands” of Viacom episodes to Prime Instant “over the next several months,” including MTV’s The Hills, Jersey Shore, The Hard Times of RJ Berger and several Real World episodes (what, no Teen Mom?); Comedy Central shows like Chappelle’s Show and The Sarah Silverman Program; and Nickelodeon episodes of iCarly, Dora the Explorer, SpongeBob SquarePants and Yo Gabba Gabba.

In Amazon’s Q4 earnings report, the company said it had 13,000 episodes available through Prime Instant Video, so the Viacom deal appears to add around 2,000 episodes.

The company also said that that in Q4 of 2011, “the number of Prime Instant Video streams increased nearly 300 percent” compared to Q3.

Since launching Prime Instant Video about a year ago, Amazon has added content from Disney-ABC, PBS, NBC, CBS, Sony (NYSE: SNE), Warner Bros. (NYSE: TWX) and Fox.

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