The net lifetime value of an Amazon Prime member is about $3,000

Amazon is busy whipping up shoppers for its annual Prime Day sale, signing up celebrities including Taylor Swift, Lady Gaga and Kobe Bryant to promote the two-day discounting event that kicks off today. But beyond the revenue boost that Amazon will get from customers eager to snap up cheap electronics, apparel and beauty products, the event’s greater value may be the people it recruits to Prime, the membership programme customers must join to access Prime Day discounts… Amazon discloses little information about the scale or financial impact of Prime, which has more than 100 million global subscribers, but separate surveys by Cowen and RBC Capital estimate that between 63 million and 75 million US households — 50 to 60 per cent — subscribe to Prime. But US membership growth has cooled recently… In 2016, Cowen estimated that the net lifetime value of a Prime member was about $3,000, taking into account their average monthly spending and the costs to Amazon. That would put the total value of US subscribers at nearly $190 billion today… Amazon’s growing advertising business also benefits from Prime, thanks to the data the company has on members’ spending habits and the time they spend on its websites, apps and devices, where they can be served ads.
Shannon Bond