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Amazon just made thousands of books free for its Prime members - here's a simple reason why

Oct 6, 2016, 02:05 IST

Amazon CEO Jeff BezosAP Photo/Reed Saxon

Amazon just launched Prime Reading, a new service that gives its Prime members free access to thousands of books and magazines, including the Harry Potter series and Sports Illustrated.

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The books are available in e-book format through Amazon's free Kindle apps. You don't need a separate Amazon Kindle device to read these books, as the Kindle app is available both on the iOS and Android.

That means if you're a Prime member, you get free access to all those books in addition to free two-day shipping, online video and music, and file storage space. Prime is Amazon's paid membership program that costs $99 a year or $10.99 a month.

Why is Amazon continuing to add so much free perks to its Prime membership program? Because once you become a Prime member, you tend to spend more than non-Prime members and become a loyal customer to Amazon. So Amazon's using all these added benefits to sign up as many Prime members as possible.

These charts by Morgan Stanley, based a recent survey, perfectly illustrates this point. It says about 40% of Amazon Prime members spend over $1,000 a year on Amazon, while only 8% of non-Prime shoppers do so. It also found that Amazon Prime members spend about 4.6-times more money on Amazon than non-Prime members.

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