Amazon: Prime fee hike not stopping membership growth
The company says it's "encouraged" by week-over-week subscriber growth over the last several weeks.
Amazon said Thursday that its latest numbers show consumers are continuing to sign up for Prime, despite a $20 fee increase that went into effect last week.
"It's early, but we're encouraged by what we see so far," Amazon Chief Financial Officer Tom Szkutak said on a conference call after the company posted its first-quarter earnings. The company met Wall Street's expectations on earnings per share and did slightly better than expected in sales.
In March, Amazon announced an increase in the fee for its Prime membership, a subscription service that includes free two-day shipping and access to Prime Instant Video streaming and the Kindle e-book library. The fee went from $79 to $99 on April 17.
When asked about the fee increase's impact on subscriptions and its relation to Amazon's efforts in media streaming, Szkutak wouldn't go into great detail, but he did say Prime subscribers continued to grow week over week in the last several weeks.
"We have a few days of information related to conversion, and we're encouraged by what we see there," he said, referring to the rate at which customers actually purchase what they put in their shopping baskets.
Prime is an integral part of Amazon's e-commerce business, and the company is dedicated to making it attractive to customers. Last quarter, Amazon said the subscription covered the shipping of 19 million eligible Prime products. Earlier this month, the company announced that the number was now 20 million. The company also has heavily invested in its video content, by buying more popular content as well as creating original shows. The company also said its video streams on Prime Instant Video nearly tripled in the last year.
When asked about Prime Pantry and whether or not the service is meant to move customers toward Amazon Fresh, the company's grocery delivery service, Szkutak dodged the question by saying, "It's an exciting option for Prime members." The program lets Prime members buy many non-bulk household items in one order for a flat shipping fee.
"We think that's interesting for customers and, again, it's a great way that we can add the selection and have the selection for those customers," he said.