There is a big reason why Amazon issues a number of press releases every single month on the things they are doing with Prime or the Kindle. Today for example, Amazon signed a deal with HBO to bring a number of its most popular television programs, sans Game of Thrones to Amazon Instant Video. Prime and Kindle owners statistically spend the most money on Amazon, which is why these are the top priorities for media coverage and customer adoption.
According to a recent survey by Consumer Intelligence Research Partners The two programs “have become significant drivers of Amazon sales, even in light of the recent Amazon Prime price increase and significant competition in the tablet computing market,” the company said.
“Both serve as superb affinity programs for Amazon, as Kindle owners spend 30% more, and Prime members spend twice as much, as the rest of Amazon’s customers,” said CIRP co-founder Mike Levin.
The Amazon Kindle Fire and Kindle e-Readers drive the bulk of digital book sales. Of the 500 people surveyed 23% owned a Kindle Fire tablet, 13% owned a Kindle e-reader, and 12% owned both for an overall 48% ownership rate. Overall, in the US there are currently 31.3 million Kindles in circulation.
Amazon Prime drives sales to the Kindle so customers can take advantage of the free eBook given out every month and encourages tablet adoption so people purchase them to watch Instant Videos. When you buy a new piece of hardware you get a month of Prime membership for free, which Amazon normally includes in their overall registered user figures. Currently there are currently 27.8 million Prime members in the U.S.
“These newer Amazon Prime customers have not yet made their first renewal decision, so they may not have completely considered whether Amazon Prime shipping and video benefits are worth it to them them, and thus are susceptible to churn,” CIRP Partner Josh Lowitz said in a statement. “However, our analysis suggests that 85% of current customers were already aware of the increase in price to $99 per year. And, even with the price increase, almost 90% of current Amazon Prime members say they will ‘definitely’ or ‘probably’ renew their membership, just 5% less than the responses we saw prior to any discussion of a price increase.”
Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about audiobooks and e-readers for the past ten years. His articles have been picked up by major and local news sources and websites such as the CBC, CNET, Engadget, Huffington Post and the New York Times.