Around 20 Percent Of Prime Customers Pay Monthly

Would consumers pay more for Prime if they were offered an option to buy it by the month instead of by the year? That was the question when Amazon introduced its $10.99 per month version of its Prime membership program — and the answer is apparently yes: About one-fifth of Amazon Prime subscribers will pay an extra $31 a year to pay once a month.

That data comes care of a new study from Consumer Intelligence Research Partners that estimates 19 percent of Amazon’s estimated 65 million Prime members (an estimated 12.3 million subscribers) picked monthly charge over the annual fee.

The study estimates that Prime members make up more than half of Amazon’s customer base — a power using group that spends twice as much as non-Prime Amazon shoppers. Prime shoppers spend an average of $1,200 a year on Amazon, as opposed to about $600 for non-Prime shoppers.

Monthly subscribers pay $10.99 for Prime’s free two-day shipping, music and video streaming, cloud storage, same-day/two-hour delivery in some cities, and more. Or subscribers can skip all that and pay $8.99 a month for a standalone subscription to Amazon’s video streaming service (that is a dollar less than Netflix charges).

“We predict the monthly payment option will improve Amazon Prime’s already very high retention rate by eliminating the $99 annual decision point,” Mike Levin, partner and co-founder of CIRP, said in a statement. “Of course, for a single membership the monthly payment option also increases Amazon’s fee revenues by about one-third relative to the single annual payment, so monthly payments also boost Amazon’s revenues.”

The study also noted that Prime’s growth is leveling off, mostly because it is approaching market saturation — it is hard to grow a service that so many people are already on board with. The monthly charge, however, manages to make the program a little more accessible and brings in more revenue.

Amazon CEO Jeff Bezos said earlier this year the company’s goal is to make Prime benefits so numerous and valuable that it’s irresponsible not to be a member.