- Amazon announced that Prime, its successful free 2-day shipping service (for a $79 annual fee), was now adding *free* movie/TV streaming to the Amazon Prime membership at no additional cost
- 5,000 shows and movies available for free streaming (vs. 20,000 available for free streaming at Netflix)
- Some analysts credit the Prime program for Amazon's rapid sales growth during the recession (26% growth in 2009, 46% in 2010)
- "Amazon Prime may be the most ingenious and effective customer loyalty program in all of e-commerce, if not retail in general." (Businessweek)
- Amazon Prime also causes trouble for other retailers - and forced many retailers to offer free shipping during the holiday season (Walmart, for example) and a group of others to create a competitive network
- ShopRunner, a part of GSI, created a network of 20+ retailers that have an Amazon Prime-like service for all of their customers
- "As Amazon added more merchandising categories to Prime, retailers started feeling the pain," says Fiona Dias, executive vice-president at GSI Commerce (GSIC) (and Creative Good Councils member) which administers the ShopRunner service. "They have finally come to understand that Amazon is an existential threat and that Prime is the fuel of the engine." 

Amazon's basic stats:
- $34.2 billion in revenue in 2010 vs. $24.5 billion in 2009
- 55% of sales in 2010 were from North America vs. 52% in 2009
- 46% growth rate of sales in North America up from 26% in 2009 (Zappos acquisition also helped a lot)
- 43% of global sales were media - first time media was less than 50% 
- 121 million customers worldwide (estimate quoted in Businessweek - Amazon does not disclose this) 

Prime program basics
- $79 per year gives Amazon customers
     - free 2-day shipping on most items (may move to *1-day*)
     - free TV show/movie streaming (library of 5,000 shows and movies)
         - note: Netflix has 20,000 shows/movies for streaming
     - "rumored"  free Kindles
          - Amazon experimented briefly in 2010 with allowing Prime customers to order a  
               Kindle, pay for it but if they didn't like it, get their money back AND keep it 
          - Rumors continue that Amazon *might* actually offer free Kindles for Prime
     - Free prime membership for caregivers of young children 

- 5 million Prime members in 2011 out of 121 million customers (estimated by Piper Jaffray's Gene Munster; Amazon does not provide this number) 
- 2 million Prime members in 2009  (estimated in 2009 by Munster)
- 58% cumulative annual growth rate, which is extraordinary 
- Available in U.S, Britain, Germany, France, and Japan 

The economics of Amazon Prime
- $900 year spent by the average Amazon Prime member in their first year of Prime membership (2009 estimate by Munster)
- $400 year spent in the year before becoming a Prime member (2009 estimates by Munster)
- 1 million new Amazon Prime  members add 1.5% to total Amazon revenue (2009 estimates by Munster)
- 92% of Prime members plan to renew their Prime membership
- 82% of Prime members buy on Amazon even if the item is less expensive somewhere else (according to survey by Channel Advisor - publisher of Amazon Strategies) 
- But, Amazon makes sure that most of its products are cheaper
- 19% of products on Amazon are cheaper than the same product on Walmart (according to a study by Wells Fargo's Matt Nemer)
- 20% of U.S. sales - $3.7 billion - may be due to Amazon Prime (Businessweek)
- "In all my years here, I don't remember anything that has been as successful at getting customers to shop in new product lines," says Robbie Schwietzer, vice-president of Amazon Prime and an eight-year veteran of the company. 
- The results "blew us away," says Jeff Holden, who led the initial Amazon Prime team and now runs Pelago, a startup that makes a mobile phone game called Whrll (Businessweek)

Phil's take: Amazon Prime's movie streaming is not about competing with Netflix. It's about delighting customers. Retailers often ask my customer experience consulting firm, Creative Good, to help them copy Amazon. But they never want to copy the right stuff. They want to imitate individual programs or interface elements rather than Amazon's zealous commitment to the customer. And it's that customer commitment that is embedded in the promise - and reality - of Amazon Prime.

Amazon Prime: Free for Caregivers (of young children mom's, etc.)
http://www.amazon.com/gp/mom/signup/info 
note: does not include free movies - just free 2-day shipping 

Amazon Wants To Give A Free Kindle To All Amazon Prime Subscribers
TechCrunch
February 12, 2010
http://techcrunch.com/2010/02/12/amazon-wants-to-give-a-free-kindle-to-all-am... 

Amazon Prime: Quora topic
http://www.quora.com/Amazon-Prime 

BITS BLOG: Amazon Couples Movie Streaming With Shipping
The New York Times
February 23, 2010
http://nyti.ms/hRguFD

Amazon Goes After Netflix, Adding Movie Subscription
The Wall Street Journal
February 23, 2010 
http://online.wsj.com/article/SB20001424052748703529004576160251732357240.html

Amazon Prime Members Now Get Unlimited, Commercial-free, Instant Streaming of More Than 5,000 Movies and TV Shows at No Additional Cost 
Amazon.com Press Release 
February 22, 2010
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&...

Heard: Retailers Struggle in Amazon's Jungle [Wells Fargo's Matt Nemer study detailed here]
The Wall Street Journal
http://online.wsj.com/article/SB20001424052748704476604576158123883200998.html

Amazon Com Inc (AMZN) 10-K
Annual Report filed on 1/28/2011
http://services.corporate-ir.net/SEC/Document.Service?id=P3VybD1odHRwOi8vaXIu...

What's in Amazon's Box? Instant Gratification
Bloomberg Businessweek
November 24, 2010
http://www.businessweek.com/magazine/content/10_49/b4206039292096.htm

How Big is Amazon Prime?
Amazon Strategies
May 14, 2009
http://www.amazonstrategies.com/2009/05/how-big-is-amazon-prime.html

Amazon's New Tote 
Amazon Strategies
February 10, 2011 
http://www.amazonstrategies.com/2011/02/amazons-new-tote.html