Membership

Could Amazon Prime Membership Top Cable TV Someday?

By / Jul 11, 2017 (Akira Ohgaki/Flickr)

With Prime Day getting people talking about Amazon Prime membership this year, it’s worth pondering whether the subscription service could someday become the most popular type of membership program in the United States. Here are some membership-related thoughts on the retail holiday.

According to one estimate, nearly a quarter of all Americans—79 million people, or 24.1 percent of the U.S. population—can call themselves Amazon Prime members. (That’s up by 13 million from last December.)

And with Tuesday’s Prime Day—a shopping holiday based on a single company’s goods and services—Amazon hopes to swell those ranks even more. A recent Recode report put the growth into stark terms. With the cable industry starting to see a modest subscriber decline caused in part by cord-cutters (it currently stands around 90 million, down by about 5 million from 2010), Amazon is on track to top all U.S. cable subscribers. Considering Amazon already runs a TV service that’s available through Prime, that’s a significant number indeed.

Amazon has been taking steps to help boost its numbers—among them, the outlet reports, is a discount option for low-income households, along with a monthly payment program.

So why put all this work into priming Prime’s pump for a single day? To put it simply, Prime Day has historically been a huge driver of the bottom line. According to U.S. News & World Report, Amazon earned an estimated $500 million to $600 million in revenue from the endeavor last year, a number that is anticipated to grow even higher this year. Additionally, the 2016 edition of Prime Day was a 60 percent jump compared to the 2015 edition of the event.

So it’s a pretty powerful way to drum up attention … and sales. Some other notable membership takeaways from Prime Day:

Highlight your low-profile services: Amazon has traditionally offered discounts on its popular devices, like the Kindle Fire and the Echo, but it’s also going a bit deep in the batter roll for some of its deals. Amazon Music Unlimited, the company’s subscription service, has a lower profile than Spotify, Quartz notes, but Amazon is using Prime Day to draw fresh ears to the offering by cutting the price to $0.99 for four months of service—a pretty solid deal out of the gate. Associations would do well to structure their discounts in this way—putting notice on initiatives that are getting pushed to the side.

Can’t beat ’em? Compete with ’em: One noteworthy wrinkle about this year’s Prime Day is that other major retailers are using the event to put out big deals of their own. Companies as varied as Microsoft, Best Buy, and Walmart are offering their own competing events. “We are seeing other big-box retailers use Prime Day as an opportunity to capture shoppers’ appetite for deals and as a way to compete against Amazon for share of wallet and mindset,” PwC Consumer Markets Lead Steve Barr told CNBC. For associations, it’s a great reminder of the marketing value of newsjacking—even if you aren’t in the same market as the high-stakes world of retail.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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