Amazon.com Inc. (NASDAQ: AMZN) has used it Prime multimedia and free shipping service for years to create a loyal customer base, as well as several devices to move it into consumer electronics. To show how well the efforts have done, its management claimed to have sold 3 million of these products and services during the third week of December:
Amazon’s 21st holiday was a record-breaker for Amazon Prime, Amazon Original Series and Amazon devices. More than three million members worldwide joined Prime during the third week of December, bringing milestone growth to the membership program which offers unlimited Free Two-Day shipping, Free Same-Day Delivery, superfast free two-hour delivery via Prime Now in more than 20 metro areas, and unlimited access to tens of thousands of movies and TV episodes, including award-winning Amazon Original Series at no additional cost. Prime members made The Man in the High Castle the most watched TV season on Prime Video this holiday by 4.5x and doubled their total viewing hours of Prime Video titles, compared to 2014. This holiday was also the best ever for Amazon devices, doubling last year’s record-setting shopping season with millions of devices sold. Among Amazon devices, the all-new Fire tablet was the #1 best-selling, most gifted and most wished-for product across the millions of items available on Amazon.com since its introduction 15 weeks ago.
Outsiders have been convinced that the costs of these new series are a loss leader, which allows the e-commerce company to compete with similar original content from Netflix Inc. (NASDAQ: NFLX) and traditional media companies. Whether this strategy helps Amazon get and keep customers is impossible to tell. But Amazon management may believe that the company cannot be left behind in terms of what it offers loyal subscribers. Management did not disclose total numbers of Prime subscribers and device buyers.
Amazon has failed with new initiatives it has offered in the past. It killed its Fire Phone earlier this year. Sales were too tiny for it to compete with similar products, particularly from Apple Inc. (NASDAQ: AAPL) and Samsung.
Do 3 million new customers mean anything for Amazon financially, or is the announcement just a useless press release?
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