Amazon Prime – Amazon’s Push for Amazon Prime might include Kindle Fire 2 subsidies

While looking for updated news regarding the new Kindles, I came across something very curious. It dawned on me that of the last 6 press releases from Amazon, 4 of them have a distinctive common thread – Amazon Prime.

Seven Days ago – 8/21  Amazon announced an expanded licensing agreement with ESPN which added  popular titles from the 30 for 30 film series available for Prime members.

Four days ago  — 8/24  Amazon announced an expanded agreement with NBC Universal, adding hundreds of  TV episodes to Prime Instant Video for Prime members.

Yesterday  8/27 — Amazon announced that its catalog of over 180,000 exclusive Kindle books have been purchased, downloaded, or borrowed from the Kindle Owners’ Lending Library more than 100 million times. Nearly all of these exclusive books are available for Kindle owners with a Prime membership to borrow for free, as frequently as once a month, with no due dates.

Today  8/28 — Amazon announced that it now ships more items with Prime Free Two-Day Shipping than with Free Super Saver Shipping – the program Amazon launched in 2002 that offers free shipping on orders over $25. Currently, Amazon Prime offers 2 day shipping on over 15 million items from it’s online store.

In a nutshell, with a $79 annual Amazon Prime Membership you get:

  1. Free Two-Day Shipping on over 15 million items.
  2. No minimum order size.
  3. Unlimited instant streaming of more than 22,000 movies and TV episodes with Prime Instant Videos.
  4. A Kindle book to borrow for free each month from the Kindle Owners’ Lending Library of over 180,000 exclusive Kindle books.

Why the Push for Amazon Prime?

My best guess is that all this hype and hoopla about Amazon Prime means that the giant online retailer has something spectacular to show us during the Press Conference in Santa Monica on September 6th. The press conference is being held very close to Hollywood and the entertainment industry. My initial thoughts on this a few days ago was that Amazon would be promoting a new content provider, like a major network or studio. As it turned out, Amazon did expand their agreement with NBC Universal just 4 days ago. On August 21st, Amazon revealed an expanded licensing agreement that added popular titles from the ESPN 30 for 30 film series to Prime Instant Video.

Amazon now has agreements for the following networks and studios:

  • Warner Bros. Domestic Television Distribution
  • NBC Universal Domestic Television
  • CBS Corp
  • Discovery
  • Fox
  • PBS
  • Sony
  • Disney-ABC Television Group
  • Paramount
  • Metro Goldwyn Mayer (MGM)
  • Viacom which brought along MTV, Comedy Central, Nickelodeon, TV Land, Spike, VH1, BET, CMT and Logo
  • ESPN 30 for 30 film series

That’s nice and all but it’s not *spectacular*.

Purely Based On Rumor

What would be spectacular… the offering of a new Kindle Fire 2 — free and free movies with an Amazon Prime membership.

As awesome as this sounds, I’m not sure of the profitability of this for Amazon. The general consensus of everyone with an opinion in this matter, has been that the cost of a new Kindle Fire 2 will be $199 and the original Kindle Fire will drop in price. Amazon needs to keep the price of this new Kindle low to be able to level the playing field with other tablets such as Google’s Nexus 7 which sells their 8 GB device for $199 and $249 for the 16 GB device.

Purely Based On My Wild Imagination

Maybe these new Kindle 2’s will need data plans. That could explain the push for Prime. Downloading books and apps wouldn’t add much to a data plan, but I imagine streaming instant videos could break the bank if used heavily. Of course this data plan would come in handy with the introduction of another rumored device that may be unveiled at the press conference – the Amazon smart phone.

So they’re pushing the pure awesomeness of being an Amazon Prime Member – possibly giving away a new Kindle 2 with every Prime Membership – and then maybe nailing us to the wall with data plans while saying: ‘Hey, you got the Kindle 2 for free and we convinced (conned) you that you needed a data plan so as to enjoy all the great extras we have to offer – so why don’t you add an Amazon Smartphone to the mix?’

Now I can see profitability. Actually, I see the money meters spinning so fast they are nearly at a standstill.

But don’t forget – this is conjecture. And it’s my conjecture at that.

Wait! I’m not quite done here yet!

All my guesses, speculation and ramblings aside – there may be a very simple reason for the Prime push. It just may be that Amazon wants good customers. Prime Members are good customers. And loyal. Loyal customers will spend their money at Amazon. They will loyally and proudly purchase books, DVD’s, toys for the kiddies, electronics for the teens, groceries, clothing – yada yada yada, including the proverbial kitchen sink.

On the other hand, there exist the fair-weather customers. They’ll purchase the Kindle Fire on sale and well-pleased with their discount will run to the nearest Android rooting exit. Because they are not loyal, they will go elsewhere for all their online shopping needs.

Amazon doesn’t make a profit from fair weather customers but they do from first rate loyal customers. It just may be that the push for Prime benefits both Amazon and the loyal customers. They make a profit and we get a lot of bang for our buck with Amazon Prime. Hey, we gotta shop somewhere, don’t we? Why drive all over the web when you can shop at the biggest online retailer? Think of the gas you’ll save. ;)

I would love to hear what you think the push for Amazon Prime is about. Does it mean a free Kindle Fire 2 with a 3 year Prime membership? Data Plans? Bundled with Amazon Smartphone? What do you think Amazon is hoping to do?

Leave your comments – and please don’t flame the author (me) for my wild imagination. Thanks! :)

2 Responses

  1. Right there with you, I also noticed the multiple mention of Prime. I was hoping that it meant they would offer a “cheap” monthly data plan for Prime members for the new Kindle Fire 2 and/or their apparent new cell phones….or maybe a “combo” deal if you buy the Fire AND a phone. I currently own no “smart” devices that require data plans….just a basic cell phone and Kindle 3. But, I have been very patiently waiting for the Kindle Fire 2, and checking updates every day for months. My contract also just expired on my phone, so I am excited to see what they will be offering with phones as well. Wifi has served me well, but I would like to be able to check my email “on the fly” with 3 or 4G since I do have a small business and would like to reply to customers promptly and check my website for sales. I can stream Prime movies on our t.v. through our Roku box, so I don’t know that I would stream to the Fire much, maybe only if we are on vacation or traveling in the car, etc.

  2. You’re right about Prime. A great tech news aggregator for these reports you comment on is realcleartechnology.com. In fact, if you one of the article in this morning’s edition, the article the site pull from Pando said that Apple will go after Google first then Amazon as all three are aiming to be content providers for consumers. This is right up your alley as you continue to discuss about Apple, Amazon, Google, etc plans for e-readers and content delivery.

    In fact, over the last few weeks, many articles have been trending not about Prime’s 2 day delivery but about Amazon’s long term goal of same day delivery. While Jeff may be preparing to fend off Apple and Google, he’s gunning for Target and Walmart as well as other bricks and mortar stores.

    Again, I recommend you check out realcleartechnology.com.

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