After declining for years to disclose how many people pay for Amazon Prime, Amazon (AMZN) CEO Jeff Bezos revealed on Wednesday in his annual letter to shareholders that over 100 million people globally have joined Amazon’s membership club.
“13 years post-launch, we have exceeded 100 million paid Prime members globally,” Bezos wrote.
“In 2017 Amazon shipped more than five billion items with Prime worldwide, and more new members joined Prime than in any previous year – both worldwide and in the U.S. Members in the U.S. now receive unlimited free two-day shipping on over 100 million different items.”
Bezos added that same-day and one-day delivery are now on offer to Prime members in 8,000 cities and towns and that Prime Now — which can deliver goods to customers in just hours — is available in 50 cities and nine countries.
Previous estimates had pegged Amazon’s Prime membership at around 90 million, but this number had not been confirmed by the company. Research has also indicated that Prime members spend about $1,300 per year on Amazon.com, $600 more than what the non-Prime Amazon customer spends.
In after hours trade, Amazon shares were up about 1.5% after Bezos’ disclosure.
In previous letters to shareholders, Bezos has discussed Amazon’s goal of making Prime such a good value that customers would be “irresponsible” not to pay for the service, which costs $99 a year in the U.S. and offers two-day free shipping among other benefits for members.
Part of Amazon’s efforts to build its Prime member base has been its investment in Prime Video, its streaming service that competes with Netflix (NFLX) and Hulu, among others.
“Prime Video continues to drive Prime member adoption and retention,” Bezos said in his letter. “In the last year we made Prime Video even better for customers by adding new, award-winning Prime Originals to the service, like The Marvelous Mrs. Maisel, winner of two Critics’ Choice Awards and two Golden Globes, and the Oscar-nominated movie The Big Sick.”
Bezos also said that Amazon’s streaming of NFL games on Thursday night accumulated more than 18 million viewers over 11 games. Amazon reportedly paid $50 million to stream NFL games, meaning it cost them about $2.78 for each viewer.
A recent survey from Loop Capital Markets indicated that 23% of Prime members would definitely cancel their membership if streaming were not included.
Source:finance.yahoo.com