Investors Cheer As Amazon Cracks Down on Prime Accounts

Amazon.com Inc. is cracking down on shared Prime accounts.

The company says it is ending a little-known but long-standing feature of its Prime membership that allowed subscribers to extend free shipping benefits to friends and family outside their homes.

The move, announced this week, will shutter the company’s “Invitee Program” on Oct. 1, redirecting members to a stricter household-sharing model known as Amazon Family.

What exactly are they ending?

For years, the Invitee Program quietly let Prime users designate one outside individual, often a relative, roommate or close friend, who could enjoy the free shipping perk without paying for a separate subscription.

Amazon stopped accepting new invitees in 2015 but allowed existing ones to remain grandfathered in. Starting next month, that door closes for good.

Affected invitees will be notified by Sept. 5 and offered a discounted annual subscription of $14.99 for one year, before transitioning to Amazon’s standard rates of $14.99 per month or $139 annually, according to company statements and customer notices.

Instead, Amazon is steering customers toward its Family program, which permits sharing with one adult, up to four teenagers, and four child profiles living under the same roof. Unlike Invitee, the Family program is explicitly tied to a single household.

The change comes as Amazon faces slowing Prime growth in the U.S., despite record-breaking global engagement around this year’s Prime Day sales event.

Wall Street is loving it

Analysts say the clampdown mirrors steps taken by Netflix and other streaming platforms to curb password sharing and boost subscription revenue.

“Amazon is clearly signaling that it wants every user to be a paying customer,” Dan Ives, an analyst at Wedbush Securities, wrote in a note to investors.

The shift mirrors moves by other subscription platforms to limit account sharing and extract more revenue from users. Netflix, whose 2023 crackdown on password sharing initially drew customer outrage, ultimately reported blockbuster growth.

In the final quarter of 2024, Netflix added 19 million subscribers, bringing its global paying membership to roughly 41 million higher than the year prior. The company reported $10.5 billion in revenue for Q1 2025, up 12.5% year over year, and projected sales could climb to $11 billion by Q2.

Analysts say Netflix’s experience suggests that, despite early frustration, Amazon could benefit from similar subscriber gains if even a fraction of Invitee users convert to full-price memberships.

Translation? More paying users means more money for the bottom line, which means more money for shareholders.

Customers are not

The decision has drawn pushback from some Prime members who say Invitee was their primary reason for maintaining a subscription.

“This was the main reason I retained my Prime subscription. Now I guess I’m free to quit,” one user wrote on Reddit. Others complained that the change erodes the value of Prime, which already saw a price hike in 2022.

Amazon, which counts more than 200 million global Prime members, has been steadily layering new perks onto the $139-per-year service, from streaming video to grocery discounts, to defend against subscriber churn. But the free shipping guarantee remains the program’s cornerstone, and any adjustment to how that benefit is shared is closely watched.

Industry observers note that tightening access to Prime shipping aligns Amazon more closely with rivals in both retail and streaming. Costco and Sam’s Club, for instance, limit their memberships to primary cardholders and family add-ons, while Netflix’s crackdown on password sharing has already produced a spike in new accounts.

For Amazon, the bet is that former Invitee users will accept the discounted offer and transition into full members. But if frustration among long-time customers builds, the change could backfire, right as U.S. Prime signups appear to be plateauing.