Half of America could have Amazon Prime by the end of the year

An employee stacks items to be shipped at the fulfillment center in Phoenix, Arizona.
David Paul Morris | Bloomberg | Getty Images

Amazon's 49 million Prime members are worth $143 billion over their lifetime with the company, Cowen and Company analyst John Blackledge said Monday.

And with its pace of new subscriptions speeding up, the online behemoth is set to rake in even more money from its members-only program.

Prime is on track to add 12 million subscribers in 2016, according to Cowen's research. That's up from 10 million new members in 2015 and 7 million in 2014, despite a larger existing customer base.

All in, Blackledge estimates roughly 44 percent of U.S. households are Prime members. That penetration could accelerate to 50 percent by the end of the year, with the service ultimately having the potential to reach more than 60 million U.S. households, Blackledge said.

Amazon does not disclose how many people are enrolled in the program. Other analysts have put the subscriber number even higher.

"Prime has maintained healthy growth largely due to [its] increasing value proposition," Blackledge said.

That growing value includes an extension of its same-day delivery service, more robust streaming options, and its recently added monthly membership plan. While an annual subscription costs $99 a year, shoppers can now pay $10.99 a month for the service.

Even if Prime's membership had already peaked, those shoppers would by far be the most lucrative for Amazon, Blackledge said. Prime subscribers purchase items from its site more than three times a month on average, compared with two times a month for nonmembers. They also generate 80 percent higher profit than nonsubscribers, Blackledge estimates.

According to Cowen's calculations, Prime households spend an average $193 a month on the site. Separate data from Consumer Intelligence Research Partners has found that 91 percent of Prime subscribers renew for a second year. Given that members rarely cancel the service once they've enrolled, Blackledge estimates the lifetime value of these shoppers at roughly $3,000.

Yet as Prime's existing pool of members grows, the key to its long-term potential is convincing nonsubscribers to pay for its ecosystem, Blackledge said. He estimates 47 percent of non-Prime households bought something from the site last month, making him "confident" it will continue to drive conversions.

In July, Amazon reported its largest-ever sales day, tied to its second-annual Prime event. That event was designed to celebrate the service's anniversary, as well as encourage additional sign-ups.

Traditional retailers are beefing up their digital capabilities to better compete with Amazon. They're also promoting their key advantage over the online site: physical stores. Bricks-and-mortar shops make it easier for shoppers to make returns, and pick up items on a tight deadline.