Amazon.com (NASDAQ:AMZN) is never satisfied with just offering free, unlimited two-day shipping to its Prime customers. This week, the company's CEO Jeff Bezos added a free six-month trial of The Washington Post to the mix for Prime members.
The free subscription turns into a paid one after the half-year trial ends, but it will cost users just $4 per month if they want to keep the access, a 60% discount off of the standard $10 monthly price tag.
It's not the first time Bezos has used his $250 million purchase of Washington Post to offer up special deals for Amazon customers. He first gave Kindle Fire owners a free trial of the newspaper through a mobile app, which now costs $4 per month.
This latest move, albeit a small one for most Prime users, continues to feed into Amazon's strategy of adding more value to its Prime membership on top of its primary perk of free two-day shipping on 20 million products.
Why give more away?
Simply put, Amazon strategically offers more free perks to its members in order to build out its subscriber base. Prime membership already offers up a host of video content, including popular movies and TV shows, and Amazon's own original programming.
Prime members also enjoy ad-free music streaming, access to the Kindle Lending Library, special member-only deals, and in some cities, free one-day shipping.
While Amazon doesn't disclose the amount of Prime members it has, RBC Capital Markets estimates the number is around 50 million in the U.S. right now, and between 60 million to 80 million worldwide.
Adding a prolonged free trial subscription to The Washington Post allows the company yet another way to (hopefully) add incremental Prime memberships.
And adding new members has been a primary focus for Amazon. Over the summer, the company launched its Prime Day event, where the company gave out discounts to Prime members on a wide variety of products for one day only. The company built up the day as a better-than-Black-Friday event, and while it may have disappointed many members, the company said more new members signed up on that day than any other day in Amazon's history. Sure, not all of them converted to paying memberships, but it's likely enough did to make it a success for Amazon.
Amazon can afford to hand out these special perks because its Prime members spend an estimated $1,100 on Amazon's website each year -- compared to $700 for non-Prime members. And according to RBC Capital Markets, the longer Prime Members stick around, the more they start spending each year. Which means Amazon has every incentive to convert existing customers into Prime members. Right now, about 40% of Amazon customers are Prime members, up from about 25% two years ago.
Free access to The Washington Post may not push many customers into Prime membership by itself, but when added to the package of perks Prime already offers, Amazon's creating a membership that's nearly too good to pass up.