Amazon Upped Global Prime Instant Video Membership 53% in 201429 Jan, 2015 By: Erik Gruenwedel
E-commerce giant spent $1.3 billion on streaming service
Amazon Jan. 29 reiterated support for its Prime Instant Video subscription service when it disclosed it spent $1.3 billion — largely on content — in 2014 on the perennial Netflix rival. By comparison, Netflix spent $2.2 billion on content obligations last year.
The e-commerce giant said global Prime memberships increased 53% last year, including 50% in the United States. CEO Jeff Bezos said the membership occurred despite a 20% price hike to the program’s annual $99 fee.
“The data is in and customers agree on a base of tens of millions,” Bezos said in a statement without disclosing actual subscriber figures.
CFO Tom Szkutak said ongoing trends at Prime include free trial members subscribing at larger rates than those who don’t opt for the free trial. Prime members who stream video renew at higher rates than those who don’t, while overall purchases between streaming and non-streaming subs remains identical.
Szkutak said Prime is growing quickly worldwide while Prime international operations remain in the early stage of development compared to North America. He said the Prime offering differs by global geography.
“The shipping speed is different [by region]. We still think [Prime international] is a good opportunity,” he said.
Meanwhile, North American media revenue grew 1% to $3.5 billion in the quarter; $11.5 billion in 2014. Media revenue includes DVD, Blu-ray Disc, music CDs, books, eBooks and video games.
Amazon attributed relatively flat North American media revenue on lower video game console sales and games.