Amazon Prime churn high, but new membership growth higher
Customer churn for Amazon.com’s (AMZN) Prime subscription service was high even before the e-commerce leader revealed that it’s considering a price increase, a new study shows. A survey by Consumer Intelligence Research Partners released Thursday found that 23% of Amazon (AMZN) Prime members do not renew. On the plus side, 39% of Amazon customers subscribe to the $79-a-year service, and the e-tailer has been able to attract enough new subscribers to more than make up for the churn, CIRP says. The percentage of Prime members grows to 45% when you include the company’s Amazon Student and Amazon Mom memberships. “Prime membership is growing even as customers already cancel memberships at a higher-than-expected rate, and a price increase could dampen membership growth,” the research firm said in a press release. Among those who canceled Prime service, about three-quarters of them did so because of the cost, said CIRP co-founder and partner Josh Lowitz. “One way to look at this is that Amazon Prime is not for everyone, but trying out Amazon Prime is for almost everyone,” he said in a statement. CIRP estimates that Amazon had about 26.9 million Prime members as of Feb. 7. That’s up from its estimate of 16.7 million Prime members as of Sept. 30 . Amazon Prime offers free two-day shipping on millions of items and unlimited instant streaming of thousands of movies and TV shows, a service that competes with Netflix (NFLX). Prime members are among Amazon’s best customers because they spend more on the e-commerce website than do non-Prime customers.