The Seattle Times reports that Amazon's Prime program, already having achieved considerable consumer penetration, is seeking new members by offering a more flexible and piecemeal entryway.
In addition to the standard $99 a year fee that offers members two-day shipping on qualified products as well as access to video and music streaming services, Amazon now is offering a video-only subscription for $9 a month, and an $11 per month option that gives them access to all Prime perks.
While the pricing for these new options is more expensive than the annual fee structure, Amazon clearly hopes that once users get a taste for Prime, they'll become full-fledged members as they are drawn into the company's ecosystem and become more regular and loyal shoppers.
The Times writes that "Prime membership has reached more than half of U.S. households and more than 70 percent of high-income households, according to analysts with Piper Jaffray ... Amazon hasn’t disclosed the number of Prime subscribers, except to say that it’s in the 'tens of millions'."
In addition to the standard $99 a year fee that offers members two-day shipping on qualified products as well as access to video and music streaming services, Amazon now is offering a video-only subscription for $9 a month, and an $11 per month option that gives them access to all Prime perks.
While the pricing for these new options is more expensive than the annual fee structure, Amazon clearly hopes that once users get a taste for Prime, they'll become full-fledged members as they are drawn into the company's ecosystem and become more regular and loyal shoppers.
The Times writes that "Prime membership has reached more than half of U.S. households and more than 70 percent of high-income households, according to analysts with Piper Jaffray ... Amazon hasn’t disclosed the number of Prime subscribers, except to say that it’s in the 'tens of millions'."
- KC's View:
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One of the things this story seems to point out is that Amazon's video strategy - which includes the production of original series such as "Bosch," "Transparent," and "The Man in the High Castle" - is working as it looks to establish differential advantages. The ecosystem approach is designed so that whether one is shopping or looking for entertainment, Amazon will be the first, best choice for consumers. I'd say that if half the households in the US are using Prime, the approach is working.
By the way ... In focusing on original video content, Amazon is competing directly with Netflix, and it took another step this past week to shore up its positioning in this area. Seeking Alpha reports that Amazon has promised not to try to "secure a short theatrical window for its films and instead go with the full 90-day approach," which is the opposite of the approach taken by Netflix. Amazon's approach also is the one preferred by movie theaters, which could give it an advantage in dealing with studios in making content deals.
