Amazon (AMZN) Prime Subs Said to Be Half of Expectations, Shares Move Lower
Amazon.com (Nasdaq: AMZN) took a bit of an afternoon hit Tuesday following reports that subscribers numbers to its Prime service might have come in lower than analyst expectations.
Citing people in the know, Bloomberg stated that Amazon Prime has attracted less than half of the originally target numbers. The sources said Amazon had about 3 million to 5 million subs with the service -- which begun in 2005 for $79 per year and offers free two-day shipping -- though they've said Amazon is working over the next 12 months to 18 months to bring those numbers up to 7 million to 10 million.
Analyst had pegged the current number at 10 million or above, Bloomberg said.
Though the Prime service might be a losing deal initially for Amazon, one analyst said it's a way for Amazon to lock-in customers and have them shop for more.
Additionally, the Prime service now offers competition to Netflix (Nasdaq: NFLX) in the streaming video realm. Amazon has promoted the streaming arm of Prime -- which launched in February of last year -- by offering free trials with its Kindle Fire media tablet.
After falling 2.9 percent, Amazon shares have rebounded and are now down just 1.4 percent.
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Citing people in the know, Bloomberg stated that Amazon Prime has attracted less than half of the originally target numbers. The sources said Amazon had about 3 million to 5 million subs with the service -- which begun in 2005 for $79 per year and offers free two-day shipping -- though they've said Amazon is working over the next 12 months to 18 months to bring those numbers up to 7 million to 10 million.
Analyst had pegged the current number at 10 million or above, Bloomberg said.
Though the Prime service might be a losing deal initially for Amazon, one analyst said it's a way for Amazon to lock-in customers and have them shop for more.
Additionally, the Prime service now offers competition to Netflix (Nasdaq: NFLX) in the streaming video realm. Amazon has promoted the streaming arm of Prime -- which launched in February of last year -- by offering free trials with its Kindle Fire media tablet.
After falling 2.9 percent, Amazon shares have rebounded and are now down just 1.4 percent.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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