I'm not surprised that Amazon is pushing Prime heavily- once you've got people paying a regular subscription (especially one as low as $80 a year) they'll rarely stop paying it.
I'm close to signing up. I tried the month free trial and enjoyed the shipping, but barely used the on demand video because there wasn't that much recent stuff on there that I could actually rent for free. I imagine that Amazon is quite committed to changing that.
Not to mention that the inhibition to purchase drops significantly. Before activating Prime I knew there was an invisible $25 Super Saver free shipping barrier that I had to break before I would complete an order on Amazon. Now with Prime, I activated One-Click Buy and haven't looked back. It's addicting having a new package arrive at your door every day or two.
<Obvious warning about irresponsible spending unrelated to the business angle of this discussion />
1. wait to see if cloud based gaming catches on, and move on that market, maybe together with trying to control the TV.
2. online banking/insurance services(maybe?). uses cloud + trust + credit cards. Those are industries are on a verge of disruption to a much more efficient and automated model, need complex automation, and are consumer facing.
3. Control the e-book distribution market worldwide,
4, Get a larger part of the content creation ecosystem(movies, publishers, maybe music or educational content)
5. An online advertising move using the kindle fire silk browser and amazon browsing history. They would combine that with their general retail savvy to create highly effective service
6. Groupon like service - have a cut of every local commerce transaction. Again superior customer knowledge helps recommend offers, and they could find a way to advertise to small business owners in their site.
But their main goal is :
Sell move stuff , more groceries / CPG and more heavier stuff. They could do all this based on the success of prime and new logistics build for it.
Amazon's foray into mobile is "just" a natural extension of their retail business. The primary purpose of the Kindle and their variety of mobile apps/services is to get consumers to buy digital goods from Amazon; just as Amazon (the retail) is to get consumers to buy physical goods. The logistics plays a large role in keeping the physical goods flowing; AWS gives them a solid platform to keep the digital goods flowing.
But the interesting thing is, I think, how Amazon realised that building a superior delivery network for bits would be just as much of an advantage as having a superior delivery mechanism for atoms was. You buy a kindle from them. Amazon ship it to you. You turn it on, buy things, and the bits just arrive. And Amazon have that process down better than anybody, even Apple.
I've been a prime user for the past year or so. Seemed a bit indulgent at first, but really love the service. Free 2-day shipping seems un-necessary when you can get super-shipper saving but every time my packages show up in two days, I'm grinning. I still have a Netflix account, but despite my love for Netflix it might only be a matter of time before I switch to Amazon Prime streaming (I don't watch a lot of TV). Now with this? Great deal.
I originally signed up for Prime because it saved me money. Not because I was paying for a lot of fast shipping, but because I would frequently have a $10 item I wanted to purchase, and i would add $15-25 worth of stuff to get super saver shipping. With Prime I just buy what I want, when I want, and never worry about shipping costs or meeting a threshold for free shipping.
Prime changes how you shop. I used to put things in my shopping cart, figuring I'd buy them later if I had something else I wanted and could drive the price over $25. Now I just buy it right away if I figure I need it - there's no hassle, no shipping fee, and I know that if it turns out I don't want/need it, it's trivially easy to return it and I won't be charged.
It also means Amazon is the first place I check for just about anything I buy online: over time I've found that it's highly unlikely that the difference in price (esp. with shipping) is going to be enough to cover the potential hassle of ordering somewhere else.
Prime is a huge win for Amazon. They take loyal customers, increase order volume and push the customers into ordering from a wider range of categories. More dollars from those customers end up going to Amazon, and the customers become less price sensitive as well.
Prime initially increased my overall spend because it was so damned easy. Particularly as here in the UK I can order a book up to about 7pm and have it arrive next day. My record, I think, is ordering about 9pm and having it arrive at 9:30am :D
In that case, it sounds like a nice bonus for Prime members, but I'm not going to pay $80/year just to get one free book for a month that I have to return later.
Of course you don't pay $80/year just to access ~$120 worth of book content. You pay to also get free 2-day shipping, a large library of free streaming videos, and what we can assume will be a growing pile of other benefits as time passes.
In the UK prime is bittersweet. Here all we get is free 1 day delivery.
That alone is pretty good - and for a "power user" of Amazon like me (who used to spend multiples of the £50 prime membership in delivery a year) it rocks.
But we don't get any of this good stuff (streaming/books).
Which is a shame because I suspect it would finally convince me to buy a Kindle :)
I love Amazon but let my Prime membership lapse after reading about the working conditions at Amazon's warehouses. I am not sure if I want to do business with them anymore.
I'm close to signing up. I tried the month free trial and enjoyed the shipping, but barely used the on demand video because there wasn't that much recent stuff on there that I could actually rent for free. I imagine that Amazon is quite committed to changing that.