Amazon Prime to surpass cable TV

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According to recent estimates, more U.S. households will soon be subscribers to Amazon Prime than cable or satellite TV.

Morningstar approximates that nearly 79 million U.S. households now have an Amazon Prime membership, the ecommerce giant’s popular shipping and entertainment service. That number is up from approximately 66 million at the end of 2016.

In comparison, a projected 90 million U.S. households will pay for cable or satellite TV this year, according to S&P Global.

Recode reported that “According to these estimates, more U.S. households may have an Amazon Prime subscription than a pay TV subscription as soon as next year.”

Amazon’s Prime Video service is not necessarily more popular than TV—the primary reason people subscribe to the service is for fast delivery of products.

Fans of Amazon Prime have called it a “no-brainer” for everyone, including lower-income American households. Amazon has been courting that demographic by offering discounts for those on government assistance, and a monthly payment option for those unable or hesitant to spend $99 for an annual subscription.

Such growth strategies are important for Amazon since more than 80 percent of America’s wealthiest households already subscribe to Prime.

Prime is at the core of Amazon’s retail business. According to studies, subscribers to the service spend more in a year than do non-Prime members, shop more frequently than others, and compare prices less.

Amazon does not disclose the number of Prime subscribers, therefore, Morningstar’s estimates are based on an analysis of Amazon’s cash-flow statement. Survey-based Prime membership estimates from other companies place the number of subscribers in the U.S. as high as 85 million and as low as 60 million.

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