Amazon.com, Inc. is planning to sell broadband internet service, bundled with its Prime video service, in Europe. Reports suggest that the e-commerce company plans to join hands with a Hollywood production studio to form an internet service provider (ISP). A report from Forbes suggested that the e-commerce behemoth offering broadband-video package would give the e-commerce giant a competitive edge over cable operators and could attract more video users to its platform.
Amazon Prime Can Easily Become ISP in Europe
Amazon could attract boost its Prime membership in Europe by offering broadband services as a perk to its Prime customers.
Setting up an ISP in Europe won’t be an issue for Amazon. According to reports, the company can start offering broadband services in Europe without any problems. Regulations in European countries like the UK or Germany allows upstart broadband providers to start the business without having to build out their own network.
“As Amazon looks to increase its market share in the international segment, a strategy to provide bundled service or internet access as a perk to its Prime customers can attract more users to its platform and drive growth in international revenues,” Forbes article reads.
eMarketer said in a report that subscription video-on-demand has strong growth prospects in Europe. The service is expected to account for nearly 60% of the total home video spending by 2020 in Western Europe, according to the report.
The online retailer offers its Prime video service in Europe and can bundle this with broadband access in future. The report from Forbes suggested that there is a strong potential for growth in Europe and the e-commerce company should drive revenues through the bundled offering.
Prime membership offers members with free shipping on qualifying orders, faster shipping times, unlimited movies streaming, unlimited music streaming, and access to audiobooks.
The online retailer boosted its total U.S. Prime membership by 19 million since July 2015, according to a report from Consumer Intelligence Research Partners. The report shows that the e-commerce behemoth has a total of 63 Prime members in the U.S., representing an increase from 44 million members since the end of the second quarter in 2015.
Business Insider reported that Prime service could be a bigger threat to retailers, instead of the video streaming giant Netflix, Inc. (NASDAQ:NFLX). According to a report from the publication, Prime members tend to buy more on Amazon.com compared to other retailers.
A report from Morgan Stanley suggested that the online retailer’s stock will move closer to the $1,000 mark due to Prime’s surging popularity. The firm said in note to clients that now is the time to buy more shares in the online retail juggernaut. The report said that 40% of Prime members spend a minimum of $1,000 on Amazon every year. The e-commerce giant understands how much of an impact Prime has on its revenues. This is why it keeps adding new features to get new subscribers and to keep old users satisfied.
A vast majority of Wall Street analysts are bullish on Amazon.com, Inc. . Even with the enormous gains the company has witnessed since 2011, nearly all analysts expect major gains. The likes of JPMorgan Chase and Co. and RBC Capital Markets forecast shares to hit $1,000 within the next 12 months.