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Amazon Has An Estimated 10 Million Members For Its Surprisingly Profitable Prime Club (AMZN)

Source: http://www.businessinsider.com/amazon-prime-10-million-members-morningstar-2013-3

jeff bezos kindle fire

Amazon hasn’t disclosed how many people have signed up for its Prime program, which offers free two-day shipping, a Netflix-like video service, and other perks for a $79 annual fee.

Now Morningstar analyst R.J. Hottovy has come out with a report that pegs membership at more than 10 million, and suggests that the program contributes about a third of Amazon’s operating income.

After a slow start, Prime got a huge boost in when Amazon started including a 30-day trial membership with its Kindle Fire tablet in the fall of 2011. Trial programs for moms and students have also helped.

Prime members are great customers for Amazon. In 2012, they were about 4 percent of Amazon’s 182 million active customer base. But they accounted for nearly 10 percent of purchases, because they spend more than twice as much as non-prime customers—$1,224 a year versus $505.

After estimating the cost of providing shipping and licensing videos and e-books versus the marginal profit , Hottovy found that Amazon made about $78 per Prime member in 2012.

While Amazon breaks even on the free shipping and other extras it provides Prime members, the subscription fee is almost pure profit, in other words.

By Hottovy’s calculations, that could grow to 25 million by 2017. Depending on how much they spend, those members could contribute anywhere from $3.2 billion to $9.6 billion in incremental operating profits.

Of course, Amazon CEO ! Jeff Bez os has been known to plow its profits back into new products and lower prices, so shareholders may not see that cash hit the bottom line.

But Hottovy’s research suggests that Amazon’s grand strategy of linking its hardware business—Kindle Fire tablets—with its services—Prime, Instant Video, and its Kindle libraries—are paying off for its core e-commerce business.

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Monday, March 11th, 2013 news No Comments

Pearson buys a small stake in Nook Media, wants a fast track for digital education

Source: http://www.engadget.com/2012/12/28/pearson-buys-a-small-stake-in-nook-media/

Pearson buys a small stake in Nook Media, wants a fast track for educational ebooks

Publishers often want to work closely with e-book outlets — possibly a little too closely — but it’s rare that they involve themselves directly. Pearson is taking that uncommon step by making a 5 percent, $89.5 million investment in Nook Media, the joint venture between Barnes & Noble and Microsoft. Some of the reasoning won’t be made public until Barnes & Noble provides holiday sales results on January 3rd, but Pearson is clear that it’s furthering its online education plans: it wants Nook Media’s distribution skills to make a “seamless and effective experience for students.” Just when we’ll see this harmony is still up in the air, though. Nook Media has yet to outline what Microsoft’s partnership means for e-books and e-readers, let alone how Pearson factors in. We’re not expecting a sea change until companies start speaking up.

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Saturday, December 29th, 2012 news No Comments

ComScore report finds drastic shift from web-based to mobile email among younger users in past year

Source: http://www.engadget.com/2012/02/11/comscore-report-finds-drastic-shift-from-web-based-to-mobile-ema/

ComScore released its annual US Digital Future in Focus report this week, offering a year-end wrap of many of the trends its tracked throughout the past year and a look towards the next. One of the more telling stats concerns email use among those in their teens and twenties. According to the report, web-based email use among 12-17 year olds dropped 31 percent in the past year, while use among those 18 to 24 saw an even bigger drop of 34 percent. Some of that can no doubt be attributed to Facebook and other email alternatives, but a big factor is the growth of email use on mobile devices; both of those age groups saw double-digit growth in that respect, with mobile email use jumping 32 percent among 18 to 24 year olds.

In terms of sheer growth in the past couple of years, though, there’s not much that matches the trajectory of tablets (obviously aided by one in particular). ComScore notes that that US tablet sales over the past two years have topped 40 million, a figure that it took smartphones as a category a full seven years to reach. Another area that saw some considerable growth in 2011 is digital downloads and subscriptions (including e-books), which jumped 26 percent compared to the previous year, leading all other areas of e-commerce. The full report and some videos of the highlights can be found at the source link below.

Continue reading ComScore report finds drastic shift from web-based to mobile email among younger users in past year

ComScore r! eport fi nds drastic shift from web-based to mobile email among younger users in past year originally appeared on Engadget on Sat, 11 Feb 2012 13:12:00 EDT. Please see our terms for use of feeds.

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Sunday, February 12th, 2012 news No Comments

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