What's Happening?
Amazon is phasing out its Invitee Program, which allowed Prime members to share free shipping benefits with individuals outside their household. This change, effective October 1, will impact members who extended their free shipping to people not living at the same address. Amazon has notified users about the end of the Invitee Program, which will be replaced by the Amazon Family model. This model allows sharing of Prime benefits with one adult and up to four children within the same household. The change aims to streamline benefits and align with Amazon's broader strategy to enhance subscription revenue.
Why It's Important?
The shift in Amazon's policy is significant as it reflects the company's efforts to ensure that all users are paying customers, similar to strategies employed by other subscription services like Netflix. By restricting free shipping benefits to household members, Amazon aims to increase its subscription revenue and reduce account sharing. This move could lead to increased revenue and shareholder value, but it may also result in dissatisfaction among customers who valued the flexibility of the Invitee Program.
What's Next?
Amazon is encouraging users to transition to the Amazon Family model, which offers a range of benefits including Prime Video, Amazon Music, and shopping event access. The company hopes that affected users will accept the discounted offer and become full members. However, if customer dissatisfaction grows, Amazon may face challenges in maintaining its subscriber base, especially as U.S. Prime signups show signs of plateauing.
