Free Shipping, Not Other Perks, Mostly Drives Prime Members, TDG Reports

Free shipping, not entertainment, is the primary driver of Amazon Prime memberships, said a Wednesday Diffusion Group report, saying more than half of U.S. adult broadband users are Prime subscribers. Nearly four in five Amazon Prime users said free shipping topped reasons for subscribing to Prime, 11 percent citing Prime Video and 10 percent naming Prime Music, photos, reading, Twitch or other benefits. Folding digital media into Prime memberships has “sweetened the deal and brought many new subscribers into the mix,” but service value shifts from media to free shipping as members buy more merchandise, said TDG President Michael Greeson. The retail perks differentiate Amazon from streaming media competitors including Netflix, Hulu, Spotify and Apple, but its Prime streaming offerings are “largely loss leaders to Amazon's cash-cow retail business,” Greeson said.