Prime Confusion

Stephen Hackett, trying to understand what Amazon Prime (which is on sale today) is:

It’s all very confusing, and my guess is that most users are like me and basically only use their Prime membership for the shipping benefits.

I have a Prime account and I honestly have no clue if it’s worth it for me. I don’t feel like I take advantage the shipping nearly enough and the only ancillary product that I use (rarely) is Prime Instant Video.

Stephen’s piece is a great breakdown of how confusing Prime has become, but there’s one point he trips up on:

Amazon doesn’t have an advertising business, but they do sell Prime.

Amazon absolutely has an advertising business, a massive one. Amazon has been selling ads for years in what has become a billion dollar side business.1 You can buy an ad on the web or on mobile; you can buy an ad on a Kindle. They now sell video ads, too. Even affiliate links, a program I take part in, is a form of advertising. Amazon is a retailer, but Amazon is also an ad company (and has been for a long time).

Every single current Kindle E-reader can be bought with or without advertising, or what Amazon calls “Special Offers.” You can opt out of these for an additional $20, but it’s clear that Amazon considers the ad-supported Kindle the main device.2

But this is the magic of the whole thing. Amazon’s advertising is so surreptitious and, crucially, so darn helpful, most of us forget it even exists.

So Stephen can be forgiven for falling for one of the greatest tricks Jeff Bezos and Amazon have ever pulled. “Tens of millions” of people pay for Prime accounts, likely sold it thinking the flagship feature, “FREE Two-Day Shipping,” is actually free. Nothing, not even the two-day shipping, is free with Amazon Prime. On top of that, customers pay, with a $20 savings, for the opportunity to be advertised to on their Kindles.

None of this is necessarily bad, but it sure is confusing. Which is why it’s best not to even think about it and just keep paying for Prime, which is what I’ll probably do the next time my membership bill comes.

  1. That may be small potatoes next to Google’s $50 billion, but a billion ain’t nothing. ↩︎

  2. The advertised price of Kindles always refers to the ad-supported version. The “Special Deals” are always written about in the positive, so the $79 Kindle “With Special Offers” seems like it comes with more than the $99 Kindle “Without Special Offers.” There isn’t even a direct URL to get to any of the non-ad-supported Kindles. ↩︎