In the shake-up of the day, it appears that Amazon’s Prime program might have far fewer subscribers than was considered to be conventional wisdom. Citing “people familiar with the matter”, Bloomberg reports that Prime has only locked in somewhere between 3 and 5 million users in to the $79 annual service, far below the nearly 10 million estimate that we’ve been hearing.
Prime, which has been a bit of a side-project for Amazon, trades that $79 annual fee for reduced shipping rates, access to Amazon’s Video on Demand service and special deals for its members. Widely accepted to be quite the bargain among the Amazon-addicted, these numbers could mean that the 7 year old service has never fully taken off the way that it was hoped.
Prime also got a nice boost with Amazon’s release of the Kindle Fire, which included a 30-day trial for free. Intended to show off the one-click order access, as well as Amazon’s streaming services, Kindle Fire buyers had the option to renew at the end of the 30 days, but it wasn’t set to renew by default.
The bigger danger here is that Prime is Amazon’s play to “keep customers loyal and fuel long-term profit”, according to Bloomberg. The company has recently inked deals with TV network Viacom to bring in shows from MTV, VH1, Nickelodeon and others. There’s talk, as well, of a stand-alone streaming service that will compete directly with Netflix.
What’s raising eyebrows about the Prime numbers is the fact that Amazon had a somewhat-disappointing quarter of earnings, losing nearly a billion dollars in sales from the quarter previous. On today’s news, shares of the company are down roughly $1.50, but it still remains strong at nearly $190 per share as of the time of this writing.
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