Amazon Prime membership reportedly soars past 10 million

Morningstar estimates that the free shipping and streaming media service has more than doubled its membership in the last year and a half, a result of offering trials to Kindle Fire buyers.

Screenshot by Jay Greene/CNET

Membership in Amazon Prime, the subscription service that offers rapid shipping as well as streaming movies, now tops 10 million, according to a new report from Morningstar.

Amazon doesn't disclose subscription numbers for the service. But Morningstar analyst R.J. Hottovy arrived at the number using a survey of Amazon shoppers conducted by market-research firm Consumer Intelligence Research Partners last November. Hottovy, whose report was first covered by Business Intelligence, also wrote that Amazon Prime now accounts for about a third of Amazon's operating income.

As Geekwire reports, it's a particularly startling number given that just a year-and-a-half ago, Amazon Prime subscriber levels were pegged at between 3 million and 5 million, according to a Bloomberg report.

Hottovy believes Amazon Prime subscriber numbers spiked after the company began giving away trials to the service with new Kindle Fire tablets. Amazon gives away one month of Amazon Prime for free to Kindle Fire purchasers, and Hottovy estimates that 30 percent to 40 percent of the trials have been converted into paying memberships.

What's more, Hottovy estimates that Amazon Prime membership will grow to 25 million by the end of 2017. His research finds that Amazon Prime members spend twice as much annually as other Amazon customers.

"We believe the appeal of Amazon Prime is undeniable, as it adds expedited shipping to Amazon's already powerful combination of low prices, a wide selection of products, and unrivaled customer service," Hottovy wrote. "Just as important, we believe Prime strengthens Amazon's network effect, as the explosive growth in Prime memberships the past few years entices merchants (including third-party sellers on the platform and wholesalers/manufacturers selling directly to Amazon) to offer a greater number of Prime-eligible merchandise."

Amazon didn't immediately respond to a request for comment on the Morningstar report.

Amazon Prime, which costs $79 a year, has evolved from a service that offers unlimited free two-day shipping on many of the goods sold on Amazon.com to perhaps the biggest rival that Netflix now faces. Amazon Prime members have access to movies, television programs, and original content created by Amazon, as well as access to books that they can borrow for free.


Updated at 10:59 a.m. PT with details from the Morningstar report.

About the author

Jay Greene, a CNET senior writer, works from Seattle and focuses on investigations and analysis. He's a former Seattle bureau chief for BusinessWeek and author of the book "Design Is How It Works: How the Smartest Companies Turn Products into Icons" (Penguin/Portfolio).

 

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