Unpacking Amazon's Prime Position

April 19, 2018

Half of Amazon's more than 100 million Prime subscribers probably signed up for streamlined shipping, and the others wanted premium video content, said Michael Simon, a staff writer at PC Magazine.

The Amazon CEO Jeff Bezos revealed the number of Prime subscribers in his annual shareholder letter on Thursday.

The letter also discussed such esoteric issues as yoga handstands and the qualities of a good memo. Bezos also wrote that Amazon shipped more than 5 billion products to Prime subscribers around the world, and Amazon's video service “continues to drive Prime member adoption and retention.”

Bezos did not say how many subscribers signed up primarily for that original video content and how many for shipping, but PC Magazine's Simon said it was “probably split halfway."

Whether it was free shipping or premium video content that drove users to pay around $100 a year for Prime, the large number of subscribers highlights Amazon's potential to further disrupt retail and the entertainment industry at the same time.

Recent moves also show Amazon's tactics extend to the brick-and-mortar realm: Amazon bought the Whole Foods grocery chain last year and the company announced Wednesday that its smart Fire TVs will be sold exclusively at Best Buy stores later this year, turning one of its biggest competitors into an ally.

“This is something of an olive branch,” said Simon. “If this is successful, we could see Best Buy branching out to more exclusive deals, maybe even with exclusive Echo products.”

Investors and consumers can likely expect more. As Bezos wrote in his shareholder letter: "You cannot rest on your laurels in this world."

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