Amazon (NASDAQ:AMZN) plans to add more perks to its Prime membership service.
At its annual shareholders meeting last month, CEO Jeff Bezos trumpeted the growth of Prime, noting that its membership base had grown 51% on an annual basis and boasting that it now includes tens of millions of members. Prime is a fundamental pillar of Amazon's business, according to Bezos, and the retailer is just getting started. Over time, Amazon will add new services and features to Prime, all in an effort to make it "irresponsible" for anyone to consider going without.
Amazon offered no set timetable for its Prime expansion or clues as to what those perks could be. But based on the company's current offerings, there are several obvious directions the company could go in.
More cloud storage
Amazon offers Prime members free, unlimited cloud photo storage through its Amazon Photos service. Prime subscribers can store unlimited photos on Amazon's servers, accessing them from virtually any internet-connected device. There are many alternatives to Amazon Photos, but they often cost money (Apple's iCloud costs between $1 and $10 per month). Unfortunately, Amazon's current cloud storage generosity ends there. When it comes to other types of files (including videos), Amazon caps its Prime members' storage at a meager 5GB.
Amazon does offer unlimited cloud storage for files, but charges $60 per year for the service and sells it entirely separately from Prime. Offering Prime members more cloud storage could prove attractive. Notably, Google Photos offers both unlimited photo and video storage, and while it compresses high-resolution versions of both to save space, it's completely free. At the very least, Amazon could expand its free storage offering to video to keep pace.
Free audio books
Amazon offers Prime members free Kindle books through its Kindle Lending Library. But Amazon could do more, expanding its offerings to include audiobooks as well as the written word. Amazon already sells audiobooks through its Audible subsidiary. For $15 per month, Audible members receive a free audiobook 12 times a year. Amazon offers Prime members discounted trial subscriptions to Audible but hasn't made it a consistent perk.
Regular Audible credits, or a discounted membership, could endear Prime to fans of audiobooks.
A discount on its forthcoming streaming service
Amazon offers Prime subscribers free streaming music in the form of Prime Music, a service it launched two years ago. Prime Music competes with subscription-based streaming services, including Spotify and Apple Music, but the experience it offers is relatively lackluster. Amazon has worked to improve Prime Music over the years with the introduction of better playlists and other features, but Prime Music remains, at best, a poor alternative to more robust offerings. Its catalogue includes many popular artists and genres but only totals around 1 million songs. For comparison, other popular services boast catalogues of around 30 million songs.
According to Reuters, Amazon plans to launch a more fully featured streaming music service later this year with a larger catalog than Prime Music. Amazon plans to charge around $10 per month for the service, putting it in line with offerings from other companies.
Integration of the streaming service with Amazon's hardware, notably its Echo smart speaker, could give it an advantage over its rivals and prompt some to switch. But the streaming music industry is well-established at this point -- Spotify has some 30 million paying subscribers, and Apple has 15 million. To attract subscribers, Amazon could offer Prime members a discount on its music streaming service.
Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Sam Mattera has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon.com, and Apple. The Motley Fool has the following options: long January 2018 $90 calls on Apple and short January 2018 $95 calls on Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.