Amazon (NASDAQ:AMZN) is taking a page from Netflix’s (NASDAQ:NFLX) playbook by cracking down on sharing in its Prime program. Following the success of Netflix’s password-sharing crackdown—which helped the streamer gain nearly 425% over three years—Amazon is ending its Prime Invitee Program on October 1, 2025.
What the Amazon Prime Sharing Crackdown Means
Previously, Amazon Prime members could share free shipping with others through the Prime Invitee Program. Amazon will now offer these users an annual membership for $14.99 for one year, after which the price rises to $14.99 per month or $139 annually, matching the standard Prime rate.
This crackdown comes amid reports of slowing U.S. Prime membership growth heading into this year’s Prime Day. Reuters noted that growth was below last year and missed Amazon’s internal forecasts. For context, Netflix experienced cancellations initially when it cracked down on password sharing, but its subscriber base ultimately surged. Amazon hopes for a similar positive effect on its subscription revenue.
AMZN Stock Trading Patterns
Since rebounding from April lows, Amazon stock (NASDAQ:AMZN) has been largely range-bound. The shares dipped slightly after the Q2 2025 earnings release but have recovered to post a roughly 6% gain year-to-date—underperforming the broader S&P 500 Index (NYSEARCA:SPX).
While long-term investors remain bullish, near-term catalysts have been scarce. Concerns over Amazon Web Services (NASDAQ:AMZN) losing market share contributed to this sideways movement. AWS, Amazon’s most profitable segment, continues to dominate cloud revenue but faces growing competition from Microsoft (NASDAQ:MSFT) Azure and Google (NASDAQ:GOOG) Cloud, which posted stronger revenue growth in the June quarter.
Streaming: A Core Part of Amazon’s Ecosystem
Unlike Netflix, streaming is not Amazon’s primary business. For Amazon, Prime acts as a funnel for its e-commerce ecosystem, encouraging higher spending. Consumer Intelligence Research Partners reports that U.S. Prime members spent an average of $1,170 with Amazon last year versus $570 for non-Prime members.
By cracking down on paid sharing, Amazon aims to strengthen this ecosystem. While the company denies that U.S. Prime growth has slowed, the move aligns with trends in the streaming industry and could incrementally increase subscriber numbers.
The Netflix Effect
Netflix’s experience illustrates that sharing crackdowns can eventually boost subscription numbers, even if initial cancellations occur. Although Amazon’s crackdown may not drive as dramatic a surge as Netflix saw, it is an incremental positive for revenue and engagement. More paying subscribers could also benefit Amazon’s advertising business, which is one of its fastest-growing segments.
Amazon Faces Competitive Pressures
Amazon faces competition across its key segments. In e-commerce, Walmart (NYSE:WMT) leverages its store network to rival Amazon’s logistics. In cloud, AWS leads the market but growth lags behind competitors like Microsoft Azure and Google Cloud, which posted 39% and 32% year-over-year revenue gains, respectively, compared to 17.5% for AWS.
Investment Considerations
The Amazon Prime sharing crackdown does not drastically change Amazon’s investment thesis. While it may support subscription revenue and engagement, broader economic conditions and competitive pressures remain critical. Investors may prefer to wait for a better entry point, especially amid signs of slowing U.S. growth.
Overall, Amazon (NASDAQ:AMZN) is taking a measured step similar to Netflix, and the market will closely watch whether this move can translate into sustainable gains for its stock.
Looking ahead, the success of the Amazon Prime sharing crackdown will depend on how customers react in the coming quarters. If adoption remains strong, it could provide a steady revenue lift and help balance slower AWS growth. For Amazon investors, monitoring subscriber trends, competitive cloud updates, and broader consumer spending patterns will be key before making long-term decisions on AMZN stock.
Featured Image: Unsplash © christianw
