Amazon Tightens Rules on Prime to Stifle Clever Sharing
By Rebecca Borison
NEW YORK -- HBO CEO Richard Plepler may not care that you're sharing access to your HBO Go subscription with friends, but Amazon (AMZN) CEO Jeff Bezos apparently isn't pleased with the amount of sharing taking place among its Prime members.
Last week, Amazon quietly changed its policy for sharing a Prime account, which provides a variety of discounts for a $99 a year membership. Previously, each Prime member was able to share their account with up to four other people. But now, thanks to the crackdown, accounts can only be shared with one other adult and four children. On top of that, the two adults must have access to the same credit cards, a move intended to discourage sharing with lots of friends or extended family members.
HBO's Plepler seems to view account sharing as a means for new subscribers to try out the service. Amazon, on the other hand, is no longer willing to give up those $99 membership fees.
The question now is whether consumers who were accessing the Prime benefits for free will transition to paid memberships, or whether they will look elsewhere for their online shopping needs. Yes, Amazon may have been missing out on those membership fees, but people using Prime tend to buy a lot more on Amazon than non-Prime users, and it's possible that the extra sales from that non-paying, account-sharing friend could have made up for the lost fees.
Gartner (IT) analyst Gene Alvarez predicts the impact won't be terribly huge either way, arguing that the change Amazon won't cost it too much revenue, nor will it propel a large number of new Prime subscriptions. Sure, there will be some account-sharing consumers who have gotten so used to Prime benefits that they will opt into an account of their own. But there will also be some who decide it's not worth it and move over to the websites of Walmart (WMT) or Target (TGT).
Prime has been around long enough, that it has hit "the point of inflection," Alvarez said, and Amazon has decided that its path forward includes a lot less account sharing. It remains to be seen whether consumers will turn away after this shift in policy.