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Discussion Starter · #1 ·
Woke up to see Jeff Bezos' front page offer of 30 days free PRIME trial. Not just for new Kindle owners, but for all. The fine print indicates that free trial members will get the same benefits as full members. I suspect that this will severely reduce this month's and next month's KOLL per borrow rates. Ugh.
 

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Here's the announcement:

Dear Customers,

2012 has been a fantastic year for Prime members. We've made some significant deals to bring you great content from every major Hollywood studio and TV network and now have over 30,000 titles available. You can now enjoy movies and TV shows on the Kindle Fire HD, Wii U, PlayStation 3, iPhone and iPad, Roku, Xbox 360, and many more devices.

Since Thanksgiving, we've added American Horror Story, Private Practice, Alias, Army Wives, The Adventures of Tintin, and Hugo. We've also just added TNT's Falling Skies and The Closer, available for unlimited streaming exclusively on Prime Instant Video. Great new movies like Mission Impossible: Ghost Protocol, Crash, Jeff Who Lives at Home, and One For the Money are coming in January.

Millions of Prime members are watching Prime Instant Video and continue to enjoy free two-day shipping on millions of products and a free Kindle book each month - all for $79 per year. If you haven't tried Amazon Prime yet, you can get started with a 30-day free trial now and begin enjoying movies instantly.

Happy Holidays and Happy Streaming,

Jeff Bezos
Founder & CEO
I noticed that here and on the second page if you click thru, they don't really mention borrowing. It doesn't seem to be their aim with this. I think they're aiming at sites like Hulu right now with all the video pimping. Just my guess.
 

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I'm fairly certain that the 30 days free Prime trial has always been an option. I know that whenever I've been ordering something, I always get the little box that tells me that the 2-day shipping would be free if I was in Prime and that I can try it for free. It's been that way for at least a year now, if not more.

They may be pushing it more than ever, but the free 30-day trial has always been an option. Of course, it's just a trial and many people cancel it at the end of the 30 days (myself included...I chose not to continue).

This is nothing new, and you still have to own a Kindle device (not just a Kindle app on a PC, phone, or tablet) to borrow books. Besides, most people only activate the free trial at a time when they're going to be doing a lot of ordering for which they'll need free shipping during that 30-day period. So I'm sure there were a bunch of free trials activated starting around Black Friday (since the free period would end around Christmas), but what reason would people have to do it now, unless they wanted to continue with the Prime membership rather than just do a trial?

Anyway, even if the borrow rate goes down, that still means there are more people borrowing over all, so plenty of borrows to go around.
 
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I don't think you understand the point of Prime.

Prime Membership Facts

Eugene Munster, a senior research analyst at investment bank Piper Jaffray who covers Amazon, performed a study of the Prime program last year. His findings are insightful about the success of Prime. He updated some of the figures for 2011. Among them:

In 2009, Amazon had 2 million Prime members. In 2011, Prime has 5 million members out of a total 121 million Amazon customers. Although that represents only four percent of all customers, Prime is growing at over 20 percent year-over-year;

Once they join Prime, Amazon's customers' gross merchandise volume grows from $400 a year to $900 a year in their first year of membership;

For each one million Prime members, Amazon's revenues increase by 1.5 percent;

Prime members spend 130 percent more than regular Amazon customers;

92 percent of Prime members surveyed by Piper Jaffray plan to renew their membership.
The cost of KOLL is nominal if it increases customer spending. Offering a free month means nothing to Amazon.
 

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Bards and Sages (Julie) said:
The cost of KOLL is nominal if it increases customer spending. Offering a free month means nothing to Amazon.
This. And Amazon can always throw more money at the Select Fund. The $1.5 million is a lot to us but a fraction of amazon's revenue/operating budget.
 

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I joined Prime and now I order a lot of stuff (relatively speaking, as I'm not much of a shopper) from Azon because I don't pay shipping and it is usually cheaper than getting it locally and arrives at my front door. Their return policy is amazing, something like 3 months for a lot of things, and I can also put 4 other family members (and that includes nieces, nephews, brother, sis, etc.) on it, though they only get free shipping, no borrows. When I have a borrow each month, I borrow one of my own books and this helps keep the Prime membership down as per my actual cost. Prime has always had a month free trial available, and I would suspect most people who try it out stay on it, so I think it actually results in more borrows in the long run. Whoever thought it up was a very astute businessperson, IMO.
 

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Discussion Starter · #7 ·
Bards and Sages (Julie) said:
I don't think you understand the point of Prime.

The cost of KOLL is nominal if it increases customer spending. Offering a free month means nothing to Amazon.
I understand the point of Prime. I'm a Prime member. I'm not concerned for Amazon; I'm concerned for me.
 

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I got a free trial back in October.  My first instinct wasn't  "Yay I can download 1 free book!"  It was "OMG, let me buy all the things I need during the free trial so I can get free shipping."

I expect most people are the same.  It might raise the amount of people borrowing (they still have to be readers with a kindle) but since Amazon has put more money in the pot for KOLL, I think (hope) it will all even out and we'll still see around $2 per borrow.
 

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KOLL is just a footnote on what Prime is all about. The free shipping (and consequent increase in ordering volume) is the biggee, and streaming video is probably #2. KOLL is way down the list. (But it's a good thing.)

I know that my own ordering from Amazon has tripled or quadrupled since joining Prime. Need a video connection cable? Order from Amazon and it's here in two days, with no trip to Radio Shack or Fry's where it would cost more. Want a DVD that's on sale for $4.99? Order up! No shipping escalating the cost, and no need to build up an order to the $25 level.
 

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The ability to borrow in KOLL is not the main reason why most people join Prime. It's just a side benefit. While I agree that probably a lot of the new Kindle Fire owners do take advantage of the KOLL during their free 30-day trial (as well as the streaming video), the average non-Fire owner doesn't join it for the lending library. They join it for the free shipping, and many don't even realize that they could borrow a book during that month.

And again, I stress that while there may be more Prime members, that doesn't necessarily mean less money for the authors. More borrows might mean less money PER borrow, but it also means more total borrows to go around.
 

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Yep, Select books are their loss leaders.

Anyone else notice the subtle shift to promoting video for the Fire and Prime instead of books? As well as the "suspiciously coincidental" glitch blackout of Netflix on Christmas Eve?

I frankly don't really care. I can't control any of it, so I just take advantage of whatever opportunities there may be and live with what may not be. All in all, Amazon gave us 99 percent of what we have right now, so they owe us nothing. I, for one, am willing to show gratitude.
 

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The 30-day free Prime trial isn't new. It's been around since Prime was introduced.
 
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genevieveaclark said:
Wait wait wait wait. Are you suggesting that Amazon launched a super secret DOS attack against Netflix on Christmas Eve?
Are you aware of the fact that Netflix's service runs through Amazon's Cloud Service? Amazon sells its cloud service to other companies. It was Amazon's service that failed Christmas Eve, knocking down Netflix.
 
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genevieveaclark said:
Yes. I also think there are probably a number of contracts and regulations that would have bearing on something like that that would make that a very stupid thing to do.
My point was that Amazon wouldn't need to launch a DOS attack. They own their cloud and can turn it off. I'm not saying they DID. I'm saying they could...very easily.

And Amazon has been known to force "contract renegotiation" with some rather heavy-handed methods (ask M-Edge about how Amazon feels about contracts).

As much as I do business with Amazon, it would not surprise me if they adopted the mafia's "protection racket" approach to contract negotiations.
 

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I think Amazon will try to keep us happy little prawns.

If there's a month where the borrows are shockingly high, and our per-book borrow comes out to much less than average, I think they'll swoop in and throw some bonus cash at it. However, they have the data, so it'll never come as a surprise to them.
 

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Mike McIntyre said:
Woke up to see Jeff Bezos' front page offer of 30 days free PRIME trial. Not just for new Kindle owners, but for all. The fine print indicates that free trial members will get the same benefits as full members. I suspect that this will severely reduce this month's and next month's KOLL per borrow rates. Ugh.
What difference would that make as long as we get a huge number of borrows? The more borrows the better. It would still be a better bottom line.

However, I agree with Dalya that if it did happen that it got too low, they'd add to the already very substantial bonus.
 

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"I think Amazon will try to keep us happy little prawns.
If there's a month where the borrows are shockingly high, and our per-book borrow comes out to much less than average, I think they'll swoop in and throw some bonus cash at it. However, they have the data, so it'll never come as a surprise to them."
It doesn't take much to buy a prawn.

More than 175,000 exclusive books were added to the Kindle store in 2012.
Amazon Press Release
http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-newsArticle&ID=1769785&highlight=

Interesting reading.
 
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