Amazon keeps giving goodies away to Prime members because it pays off in the end


Amazon is getting into the music streaming game (for real this time!), and it's hoping Prime users will carry it to glory. The new service, Amazon Music Unlimited, is your everyday Spotify competitor on its own, but costs just $7.99 per month - or $79 per year, which equals $6.58 per month - if you subscribe to its premium membership platform. (It's $3.99 per month if you can live with it being constrained to the Amazon Echo.)

This comes on top of the many other perks Amazon throws Prime's way, including expedited shipping, early access to certain deals, and its Prime Video video streaming service.

All of that begs the question: Why would a major business like Amazon keep adding perks to Prime at no cost? Well, as this chart from Statista shows, it's because Prime users tend to make up the difference. According to data from Morgan Stanley, the average Prime user spent almost $2,500 through Amazon in the last 12 months. That's miles more than the $544 average from everyone else. Naturally, Prime members are more likely to buy ultra high-end products.


Ultimately, for all the other fields Amazon is entering, it's still an e-commerce company at heart. The more people it can cultivate into Prime members, the more likely those perks are to entice people into buying through Amazon, and the more money Amazon can make. In other words, Music Unlimited isn't an isolated deal.

amazon prime chart


Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.

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