Amazon might have far fewer customers signed up for its Amazon Prime membership than previously estimated by analysts.
The Prime membership costs $ 79 annually forAmazon clients, who in return get free of charge two-day shipping on most items sold by means of the retail giant. The service is desirable to buyers since a lot of feel like they’re acquiring far more of a deal given that shipping fees aren’t factored into individual purchases. And while Prime memberships increase the shipping expenses for Amazon, study shows that Prime consumers are far more loyal and make more purchases. (I’ve got a stack of graphic novels that far more or less proves that this is accurate.)
The total number of Prime memberships ranges from 3 million to five million considering that October 2011, according to a Bloomberg report that cites 3 anonymous sources with expertise of the matter. If the data is true, that would mean that the organization has much less than half of the ten million memberships estimated by some analysts.
Amazon was unavailable for comment about the membership numbers. (Nevertheless, if the organization does respond we’ll be confident to update the post.)
Amazon’s aim over the subsequent 18 months is to enhance Prime membership to the 7 million to 10 million range, according to the report. One particular way the organization is planning to enhance membership is even though Prime’s commercial-totally free streaming video service. The firm lately signed licensing offers with Fox, NBC, CBS, and Viacom to increase the selection of tv shows accessible, which tends to make the Prime video service more competitive with Netflix and Hulu. But, Amazon clearly desires to use the streaming video service as a perk to enhance Prime membership far more than it wants to compete with other video services — (making a standalone Amazon streaming video service even more unlikely).
Even if Amazon is productive in boosting Prime memberships over the next year, it’s unlikely that it’ll lessen the fears from investors who are concerned about the company’s future revenue growth.
Last month, Amazon reported revenue of $ 17.4 billion for Q4 2011, which was practically $ 1 billion lower than Wall Street’s estimates. Not only that, but the organization stayed irritatingly silent about its other large ploy into gaining customer loyalty, the $ 199 Kindle Fire tablet. That could indicate that either sale of the device had been lower than expected or purchases via the Kindle Fire didn’t reach estimates (or each).
If you combine the slow Prime membership growth and Kindle Fire information silence with the recent rumors that Amazon is plotting to open up brick-and-mortar retail shops across the country, it’s no wonder investors are worried about the firm’s future revenue.
Filed under: media, VentureBeat 
