The Power of Amazon Prime

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Dec. 27 (Bloomberg) –- Chegg President & CEO Dan Rosensweig and Bloomberg’s Julie Hyman reports on the number of Amazon Prime members and how important the program is to amazon. They speak to Jon Erlichman on Bloomberg Television’s “Bloomberg West.” (Source: Bloomberg)

Prime now has tens of millions of members worldwide.

To talk about this, our guest host of the hour.

He is an educational platform and offers homework help.

Julie hyman is also joining us with the latest.

Let's start with you.

The take away from the numbers that amazon has shared with us.

That tens of millions number that jeff is those mentioned in a statement -- a lot of analysts have extrapolated that to mean that they have in the low 20's range of amazon prime members.

The good news is that those members tend to spend a lot more on amazon.

I have seen estimates that they may spend six times as much as the average user.

They pay $70 for that annual membership.

It amazon pays their shipping cost.

Amazon is eating the cost of that.

These are attractive customers for them.

They have also said that on the peak shopping day, which was cyber monday, they saw a 39% increase in the number of orders.

I was just looking at enough -- a note that says that the increase year-over-year is higher than anticipated.

Analysts are looking for $26 billion in sales.

They say there is a little room for amazon to meet that.

Dan rosensweig, let's bring you into the conversation.

Happy holidays.

Talk to us about the power of prime.

How important is this membership program for amazon?

Historically, it was probably even more powerful than it is today.

Historically, there was a power -- a battle between walmart and anybody online.

The power of free shipping was a huge money-saving.

Going forward, as products become more digital, we will see.

I think it will become more expensive for amazon.

A lot of people use it that would have used it anyway.

We will see if they will start weaning people off of that going forward.

You have seen them try to do other things.

I think it was genius early on.

They built a loyal audience base.

Most of those people who are buying all of that through amazon would buy it anyway.

If their investors let them keep losing money, i think they will keep doing it.

I do not think it is as important going forward as that was.

Tooley, what do these numbers tell us about the broader online shopping season?

There is a lot of optimism that has been surrounding the season.

They predicted we would see sales go up 15%. the latest numbers say that the holiday season through december 22, we saw a 10% increase.

That was focused on desktops.

That does not include mobile.

We could see a few more percentage points added.

These amazon numbers do seem to show that there is a lot of demand.

Keep in mind that amazon's numbers are about the number of orders.

One of the big questions coming out this holiday season is are we going to see the same trend in online shopping that we have seen off-line?

Lots of discounts.

Are we going to see that

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