What's Happening?
Amazon.com Inc. is implementing changes to its Prime membership by ending the Invitee Program, which allowed subscribers to share free shipping benefits with individuals outside their household. This program will be discontinued on October 1, redirecting members to the Amazon Family model, which restricts sharing to individuals within the same household. The Invitee Program previously allowed Prime users to designate one outside individual to enjoy free shipping without a separate subscription. Amazon stopped accepting new invitees in 2015 but allowed existing ones to remain. Affected invitees will be notified by September 5 and offered a discounted annual subscription of $14.99 for one year before transitioning to standard rates. The change comes as Amazon faces slowing Prime growth in the U.S., despite high engagement during Prime Day sales.
Why It's Important?
The decision to end the Invitee Program reflects Amazon's strategy to increase subscription revenue by ensuring each user is a paying customer. This move mirrors actions taken by other subscription platforms like Netflix, which successfully boosted subscriber numbers after limiting account sharing. Analysts suggest that Amazon could see similar gains if Invitee users convert to full-price memberships. The change aligns Amazon more closely with retail and streaming rivals, potentially increasing revenue and shareholder value. However, it may also lead to customer dissatisfaction, as some Prime members valued the Invitee Program as a key benefit.
What's Next?
Amazon is steering customers towards its Family program, which allows sharing with one adult and up to four teenagers and child profiles within the same household. The company hopes that former Invitee users will accept the discounted offer and transition into full members. However, if frustration among long-time customers builds, the change could backfire, especially as U.S. Prime signups appear to be plateauing.
