Investors Rejoice as Amazon Tightens Control Over Prime Accounts

Investors rejoice as Amazon tightens controls over Prime account usage

Netflix, in a similar move, has recently tightened its stance on password sharing, leading to an increase in new accounts. Meanwhile, Amazon, with its slowing Prime growth in the U.S., has decided to shutter the Invitee Program, a feature that allowed Prime subscribers to extend free shipping benefits to one non-household member.

The tech giant reported a revenue of $10.5 billion for Q1 2025, marking a 12.5% year-over-year increase. Despite this growth, Amazon faces a plateauing U.S. Prime signup trend, prompting the company to take action.

Amazon's Invitee Program will be discontinued on October 1, 2023. Existing invitees will be notified by September 5 and offered a discounted annual subscription of $14.99 for one year. After the discount period, affected invitees will transition to Amazon's standard rates of $14.99 per month or $139 annually.

Amazon is betting that former Invitee users will accept the discounted offer and transition into full members. The company has been adding new perks to the Prime program to defend against subscriber churn, but the move to curb password sharing could potentially frustrate long-time customers.

Some Prime members have criticised the ending of the Invitee Program, stating it was their primary reason for maintaining a subscription. This could backfire, especially as U.S. Prime signups appear to be plateauing.

In contrast, Netflix added 19 million subscribers in the final quarter of 2024, bringing its global paying membership to roughly 41 million, higher than the year prior. Netflix projected sales could climb to $11 billion by Q2 of 2025.

Costco and Sam's Club limit their memberships to primary cardholders and family add-ons, mirroring steps taken by streaming platforms like Netflix and Amazon. Amazon is steering customers towards its Family program, which permits sharing with one adult, up to four teenagers, and four child profiles living under the same roof. The Family program is explicitly tied to a single household.

Analysts believe the clampdown on shared Prime accounts is a positive move for the company. As more companies adopt stricter policies to boost subscription revenue, it remains to be seen how customers will adapt to these changes. Amazon counts more than 200 million global Prime members, a testament to the program's enduring popularity. However, the company's decision to end the Invitee Program may signal a shift in its approach to customer retention and growth.