Amazon Prime reaches 200 million members
Yahoo Finance's Daniel Howley breaks down Jeff Bezos’ final letter to shareholders as Amazon’s CEO.
Video transcript
KRISTIN MYERS: Jeff Bezos has published his final letter to shareholders as CEO. We've got Yahoo Finance's tech editor Dan Howley here. So Dan, give us the details from the letter. What did Bezos have to say?
DAN HOWLEY: Yeah, there are a few interesting tidbits out of this news-- sorry, shareholders' letter. Essentially, one of the top line items-- and Julia La Roche jumped on this way early-- was the fact that the company openly admits that they have to do better by their employees. That's something that has been an ongoing issue for Amazon. Bernie Sanders, obviously, has been on top of them for that. But they also do push back, saying that they do offer $15 an hour for their employees. They also offer healthcare for their employees. But it was something that was worth mentioning in the shareholders' letter.
One of the other things that I think really stands out is Amazon, which doesn't normally give the number of subscribers to Prime, is now doing that. They said they had 200 million subscribers to Amazon Prime right now. That, by the way, is a 50 million subscriber increase over last year. Now, just to give you an idea of how much of that was driven potentially by the coronavirus pandemic, prior to that, in 2018, they had 100 million. So to get to 150 million took them two years. To get to 200 million, though, took them one. So they managed to cut that time down.
And then, in his shareholders' letter, Bezos basically was pushing the value that Prime provides to their customers, essentially saying that it helps to save customers a lot of money and a lot of time over the long term and essentially saying, look, if you say that the amount of Prime managed to save people $10 per hour, he says conservatively, that 75 hours multiplied by 10 an hour and subtracting the cost of Prime-- this is for people going to shop versus using Prime-- he says overall in 2020, that Prime managed to create $126 billion of value for its customers.
Now, that's not necessarily real value that people are able to take home and put in their pockets. But it is essentially, what he's saying, saving people when they go to the store. So a lot that's interesting that Bezos hit on, obviously, touching on AWS. There was 30% implied revenue. He said basically that $64 billion versus-- would be normally what people spend, corporations spend versus $45 billion, what they spend on AWS. So that's $19 billion in value creation for their corporate customers.
A real lot of interesting tidbits here. Obviously, Amazon, though, still, still under investigation for potential antitrust issues. And they are having an active investigation right now out of the EU, the European Commission looking into antitrust as well there.
KRISTIN MYERS: All right, thanks so much, Yahoo Finance's tech editor, Dan Howley, with all of those details. 200 million subscribers is quite a lot, especially since Amazon Prime, as we were discussing, is not necessarily available everywhere. So it'd be interesting to see how that continues to grow going forward.
