Break out the party favors, because Amazon Prime has just turned 7. Like any proud parent, Amazon.com (Nasdaq: AMZN ) took the opportunity to beam about its offspring's accomplishments. In this case, CEO Jeff Bezos really does have a lot to brag about, as Amazon Prime is widely considered to be a massive success, even though Amazon has never disclosed subscriber figures directly.
Evidently, erotic novels are making a big splash among booksellers. When Barnes & Noble (NYSE: BKS ) reported first-quarter results a week ago, it specifically said that comparable-store sales benefited from strong sales of the Fifty Shades of Grey series, along with continued fallout from the liquidation of Borders. That's like approximating the recent success of an erotic novel to the bankruptcy of a primary competitor.
Amazon is also enjoying the adult novelty, similarly citing Fifty Shades of Grey as its No. 4 top item sold with Prime free shipping this year. The top three spots were occupied by the Kindle Fire, $79 Kindle, and Kindle Touch, in that order. The service now includes more than 15 million unique items eligible for Prime shipping.
The company has also been aggressively expanding its Prime Instant Video library to challenge Netflix's (Nasdaq: NFLX ) dominance and has grown from approximately 5,000 titles to more than 22,000. Instant Video is also now available on a wide slew of devices, including gaming consoles and mobile devices.
When the Kindle Owners' Lending Library launched less than a year ago, it had less than 5,000 titles. It has now exploded to over 180,000 titles available that Kindle owners can borrow for free without due dates.
Importantly, even as Amazon has continued to jam new features and services into the Prime package, it has kept the price perched at just $79 per year, incrementally increasing its value proposition to consumers. Bezos said, "Amazon Prime is the best bargain in the history of shopping, and it's going to keep getting better." That may sound like an exaggerated superlative, but it's hard to argue with him.
In characteristic fashion, Amazon was frustratingly vague, simply saying that there are "millions" of members. It also includes the useless fact that Prime members could order 500 different items every day of their lives and still not order every Prime item. That factoid comes courtesy of the army of fourth-grade algebra students that Amazon has on the payroll, who would tell you that equates to 82 years' worth of items at that rate.
Amazon Prime truly is one of the biggest disruptive threats to traditional retail. Too bad the company simply won't give investors any specific figures that actually matter.
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