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! 🙂

Amazon Kindle and the Path of Least Resistance

Mark Cuban wrote about the path of least resistance on his blog a while back. The post itself is one of the best posts I’ve ever read anywhere – easily in my top 10 most valuable posts ever. Some people don’t like Mark Cuban – However, there’s no doubting that he understands business very well and has built up a succession of successful companies. For me personally, I love that he doesn’t hide the amount of hard work he had to put in to be successful.

Which brings me to why the Path of Least Resistance is hugely important. In any endeavour there is your core aim, and then there are a bunch of extrinsic items and circumstances you have to navigate – gumption traps, enablers, distractions etc.

Let’s take the example of going to see a movie. Your core aim is to experience the movie and get entertained. The extrinsic factors are things that are necessary to watch movies and also at the same time take away from the experience – the money to buy tickets, getting your car out, walking from the car to the theater, waiting for the movie to start, noisy people two rows ahead of you, finding a show time that matches your schedule, the theater being the wrong temperature, and so forth.

Whenever we talk about a good product or website we’re essentially talking about a product that has figured out the path of least resistance, or at the minimum, less resistance than every other competing product. Take – it’s a 13.2K sized page (2.5K for repeat visits) that loads really fast, focuses on the core thing people are looking for i.e. search box (and afterwards search results), and has few distractions. Google tried having 40 search results per page and found that they lost 30% or so of users because of the fractionally longer wait time. Google is a company that understands path of least resistance, and so does Amazon (one-click anyone).

Speaking of Amazon, let’s talk about the Amazon Kindle, and the fact that it really is the path of least resistance for reading. There are a few really important things here –

  1. Extremely easy and quick to buy books. Wireless 1 to 2 minute downloads are so much easier than transfers from the computer, let alone trips to the bookstore, that no competitor can match the kindle experience until they incorporate wireless downloads.  Note that if you love the experience of being in a bookstore or even reading in a bookstore it’s important to differentiate that as an entirely different thing you’re looking for.
  2. Very readable screen with changeable font. The Kindle provides a much better reading experience than any electronic gadget (other than other electronic readers). This again is hugely important – all the people who are excited about reading on the iPhone just don’t understand the convenience of having a bigger screen.
  3. Storage and Transportation – Another huge advantage (which i am acutely aware of as I have to once again leave behind books as I move countries) is the ease of carrying books, papers, magazines with you and having them all on the Kindle.

There are a few other benefits I could list like easy access to wikipedia, a dictionary, etc.

One of the most overlooked factors that makes the Kindle great for reading is that it doesn’t do that much else – there are things people are taking as negatives i.e. no colour screen, no video support, experimental browser, etc. that are actually beneficial because they encourage reading as opposed to surfing, playing games, seeing photos and videos etc.

If Amazon are serious about making a device that encourages reading, then avoiding the plague of information overload and ADD that happens on the internet is essential. You just have to look at all the facebook apps and celebrity news websites to realize that a lot of people online are just wasting their time as opposed to gaining any knowledge or doing anything productive.

The more options and more of an internet like experience Amazon provides the more it loses the customer’s focus. Perhaps in this case Path of least resistance includes tuning out distractions, and keeping the Kindle’s feature set narrow by conscious choice.

I’ll close by saying that as of this moment the Amazon Kindle really is the path of least resistance when it comes to reading. The biggest gumption trap is the $359 price, and Amazon just needs to figure out a way to reduce the price.

The really big twist is going to come later – when Amazon changes the kindle from a ‘buy books anywhere’ device to a ‘shop anywhere’ device. And sometime soon after (or before) Google gets involved.

Is Verizon confusing the Kindle for an iTouch or did they get their hands on Kindle 2.0?

Verizon has a series of ads touting their Fios service. Interestingly enough they show the cable company guy using a clipboard whereas the Verizon Fios installer guy uses a Kindle.

The part that stood out for me (and for the person who added the clip) – the Fios guy uses the Kindle like he would a touch screen –

Possibility 1: Kindle 2.0 has a touch screen and Verizon got their hands on a trial version.

Possibility 2: Verizon is just creatively embellishing Kindle’s functionality in the ad to further accentuate their technological superiority over the clipboard toting cable companies.


My money’s on the latter option – Which one do you think it is?