Nozak Consulting

A Complete Guide to Amazon Prime

William Nozak

Amazon Prime, launched in February 2005, began as a subscription service offering free two-day shipping within the United States for a flat annual fee. This innovative model aimed to increase customer loyalty and improve the shopping experience. Over the years, Amazon expanded Prime’s benefits to include various perks.

By 2006, Prime membership was extended to Japan, Germany, and the UK, following its success in the US. By 2011, the service had evolved beyond shipping benefits; Amazon introduced the Kindle Owners’ Lending Library, allowing members to borrow certain titles for free.

The year 2014 marked a significant expansion for Prime by introducing Amazon Prime Music and Amazon Prime Video, offering members access to a vast library of music, movies, and TV shows. This move positioned Amazon as a competitor in the digital media space, challenging established streaming services.

Amazon has continuously increased the annual fee for Prime membership, reflecting the expanding suite of services and benefits. Despite the cost increases, Prime has grown in popularity, amassing over 200 million subscribers worldwide as of 2021.

What is Amazon Prime?

Amazon Prime is a subscription service offered by Amazon that provides members with various benefits. These include free and expedited shipping on eligible items, access to movies, TV shows, and music streaming through Amazon Prime Video and Amazon Prime Music, and exclusive shopping deals.

Prime members also have access to a selection of free e-books and magazines via Prime Reading. They have unlimited photo storage through Amazon Photos and early access to select Lightning Deals.

Additionally, Prime offers grocery delivery services through Amazon Fresh in select areas. With its comprehensive range of services, Amazon Prime aims to enhance its members’ shopping and entertainment experience, providing convenience, variety, and exclusivity.

What is the Cost of Amazon Prime?

As of March, 2024, the Amazon Prime membership fee is $14.99 per month or $139 per year. You can also access Prime Video for just $8.99 per month. 

Amazon Prime offers a student rate of $7.49 per month or $69 per year, as well as a Prime Access rate of $6.99 per month for recipients of SNAP, EBT, and Medicaid benefits. 

Key Notes

Membership Numbers

Amazon Prime has surpassed 200 million members worldwide as of 2020. This marks significant growth from its earlier years, indicating the service’s increasing popularity. Amazon hasn’t released updated membership numbers since 2020.

Amazon Prime Day Sales

Amazon Prime Day has become a major shopping event. For instance, in 2022, consumers spent over $12 billion during Prime Day. This was surpassing sales from the previous year by $1 billion.

Streaming Content

Amazon Prime Video is a significant part of the service, with a substantial investment in original content. As of 2023, Amazon spent approximately $16 billion annually on video and music content. $7 billion of that was for original content creation.

Geographical Reach

Prime services are available in 23 countries worldwide, including the United States, United Kingdom, Germany, France, Italy, Spain, Japan, India, and more.

Revenue from Subscription Services

Amazon’s revenue from subscription services, which includes Prime memberships, was reported to be over $25 billion in 2020, showcasing the financial significance of Prime to Amazon’s overall business model.

User Engagement

Prime members reportedly spend more on average than non-Prime members. Studies suggest that Prime members spend about $1,400 annually, while non-members spend around $600.

Prime Video Viewership

Amazon Prime Video is one of the leading streaming platforms, with millions of viewers worldwide. It competes closely with other streaming services like Netflix and Disney+.

These statistics highlight Amazon Prime’s significant impact on e-commerce, streaming media, and consumer behavior. The service has not only influenced how people shop but also how they consume media and entertainment.

Amazon Prime Statistics

People all over the world use Amazon Prime. Most of the people who are members of Amazon Prime are from the United States. The number of non-US members has steadily grown, but Amazon has not released exact figures in a few years.

It is estimated that the expansion has driven an increase of at least 25% in the last few years.

Global Subscribers

It is difficult to pinpoint how many subscribers now exist for Amazon Prime since reliable data hasn’t been released since 2020. We know that by 2018, there were around 100 million subscribers and that by 2020, that number had doubled to 200 million.

The company has been investing in infrastructure to accommodate growth in the 23 countries that now have Amazon Prime. To help with European growth, which is their current focus, there has been a steady stream of warehouse and distribution center construction.

US Subscribers

Of the 200 million people who have Amazon Prime, over 140 million of them live in the United States. That figures out to around 74% of members. Consider that ten years ago, in 2013, the number was 25 million. By 2015, the number had grown to 50 million. In 2018, they broke the 100 million threshold.

Predictions for future growth anticipate that the number of Amazon Prime members will reach between 160 and 170 million by 2025. Of course, that is a substantial portion of the population of the United States. There are currently around 335 million people in the US, so Amazon is approaching full market saturation.

Demographics of Users

There are substantial portions of most demographics represented in Amazon Prime members. The most distinctive is age, with most members in their early 30s and 20s. Eighty-one percent of the 18-34 demographic have a Prime membership. That number drops to 68% when looking at 35-54 year olds. It goes down even further from there.

What is Included in Amazon Prime?

Amazon Prime offers a comprehensive suite of benefits tailored to enhance the shopping and entertainment experience for subscribers.

  • Members gain access to free, expedited shipping on millions of eligible items, ensuring swift delivery of purchases. 
  • Prime Video unlocks a vast library of movies, TV shows, and original content for streaming at no extra cost. 
  • Prime Music provides ad-free access to a diverse catalog of songs and playlists. 
  • Prime Reading offers a curated selection of eBooks, magazines, and audiobooks. 
  • Prime members enjoy exclusive deals and discounts during special events like Prime Day, along with access to features like Prime Gaming, Prime Photos, and more, making it a versatile and valuable membership for individuals seeking convenience and entertainment.

In some surveys, up to 90% of respondents said that was the primary reason they kept an Amazon Prime membership.

What is Amazon Prime Day?

Amazon Prime Day is an annual event exclusively available to Amazon Prime members, offering a plethora of deals, discounts, and special offers across a wide range of products.

Originally launched in 2015 to celebrate Amazon’s 20th anniversary, Prime Day has since evolved into a highly anticipated shopping extravaganza, comparable to Black Friday and Cyber Monday.

Typically spanning over 48 hours, Prime Day features lightning deals, limited-time offers, and exclusive promotions on millions of items, ranging from electronics and gadgets to home essentials and fashion.

With new deals launching as frequently as every five minutes, Prime Day presents an unparalleled opportunity for Prime members to score significant savings and snag coveted products at unbeatable prices.

Beyond shopping, Prime Day often includes entertainment offerings such as exclusive product launches, live performances, and special events, making it a multifaceted celebration of Prime membership and consumerism.

Income and Spending for Amazon Prime Members

One of the reasons why Amazon tries to expand the number of members is that Amazon Prime members tend to spend significantly more than non-members. In fact, in some studies, this number has been shown to be over 2x the amount, with the average around $1,400 per year instead of $600.

Amazing Prime memberships also bring in much money for the platform. From 2017 to 2023, the amount of income generated by subscriptions grew from just below $10 billion to over $35 billion a year.

Amazon Prime Membership in a Nutshell

Amazon Prime membership has grown exponentially over the last ten years. With new markets opening up and infrastructure improving, the numbers are expected to continue increasing rapidly.

Exact information about Amazon Prime is a closely guarded secret. Amazon ensures that not much information reaches the public despite the company being publicly traded. Despite this, the success of Amazon Prime is clear, and Amazon continues to duplicate that success in each new country that they move to.