I’m a big fan of Amazon Prime, have been since the very first day. The original goal of Prime was to build loyalty. If I’ve already paid my $79 for the year, I get free 2nd day shipping on anything I order through Amazon. And if I already have free 2nd day shipping and the price of an item is as low or lower than anywhere else I could buy it, why would I go elsewhere? Very smart.
Now Amazon has raised the price of Prime to $99 per year. I’m in. No matter the reasoning behind the price hike, it’s been about 9 years without a price hike and Amazon’s costs have certainly gone up. In addition, I get lots of streaming content and a huge lending library of free books if I happen to own a Kindle (which I do).
The price raise will mean hundreds of millions in additional annual revenue for Amazon. Good for Amazon, but also good for Netflix. Amazon’s streaming video service is a strong competitor for Netflix. Though Amazon does do a lot of à la carte video rentals, the rentals and discounts included with Prime offer are similar enough to Netflix’s model to be considered a competing service.
With the price hike, Amazon has just taken a bit of pressure off of the Netflix pricing model. Netflix has been facing a financial squeeze, a choice between reducing content to save money or raising their prices in order to stay competitive. With the Prime price hike, Netflix has a little bit more breathing room. Though that might sound counterintuitive, that will make Netflix a better service.
As much as I am a fan of Amazon Prime, I am even more a fan of Netflix and the new net-driven studio model they represent. And this $20 Prime price hike will be good for both companies.
Some things have changed since day 1 of Amazon Prime
1) Not every thing is free 2-day shipping. Many <$10 items were snuck into the “Add On Item” category, even for Prime members
2) I didn’t want Amazon Instant Video
3) I don’t use Kindle.
If Amazon is positioning itself to be a Netflix competitor, it better have its version of House Of Cards on it.
Monthly Netflix >>>> Annual Prime (Video).
I am dropping my Prime member ship once the current term ends.
I’ll be dropping mine as well. The truth is, I’ve always known that it was an absurd proposition: “pay us 80 bucks a year so that you’ll be even more inclined to buy stuff from us instead of competitors.” I signed up for the free trial a month before Christmas, and got hooked.
But I really don’t need Amazon Prime for shipping, let alone for their poor video service or their Kindle-only book sharing. I suspect they’ll do just fine with this price increase, but they’re going to lose a lot of people like me who were on the fence on the value of Prime anyway. Which means they’ll lose quite a few sales they would’ve made since Prime made it so easy to buy. I like Amazon… but I also think they’re getting too big for their britches.
I don’t have a Kindle and don’t use Instant Video (AIV). However, I don’t agree with the folks that are dropping the service. I am sure if you add up the cost of shipping and compare many of us come out ahead. One little known fact is that you can share it with up to 4 “family” members. (the quotes are intentional, read between the lines) Hmm, all that for $25 per person (household)?
Some other changes not mentioned are the change to the overnight fees. It used to be $3.99 per item. It still is in some cases. However, I am seeing more items shift to $5.99, 8.99 and higher to account for weight and weekend charges.
I’ll be keeping my service since I am hooked like a drug addict. Once the grocery service hits my area I will likely try that too. I just like have my time for other things than going to stores. If they add Lending Library to iOS (unlikely) and AIV to Apple TV (even more unlikely) then it would be the near perfect service.
I live in a small community on the west coast of Canada. The people who own the small business’s are part of my community, if they don’t survive what happens to my community?
If we all shop on Amazon what have we got left?
I search Amazon for the book I want and then I go to my local book store and buy it, and yes I pay a lot more but Bev get to feed her family and pay her mortgage.
It’s about choices, what kind of a world do I want to live? There are many things greater than the few dollars saved. Like living in a healthy community.
What do you choose?
In Canada, we get nothing for our Prime membership but the two day free shipping. No Video service, no music, no Kindle library. Nothing but shipping for the foreseeable future for the same price as what U.S. members pay for much, much more return. When it runs out I’m cancelling.
Its like that with any small community, heck – small businesses can even partner with amazon and sell their products through the amazon market. I’ve bought quite a few things from amazon that wasn’t actually “from” amazon. Purchases from small shops in Canada I had never even heard of got my business though that market. You ask why buy online when you can support a struggling local shop – I ask would the local shop be struggling if it catered to more than just local community?
yeah i really have no interest in AP video. i only wanted it for the shipping.
“I don’t agree with the folks that are dropping the service. I am sure if you add up the cost of shipping and compare many of us come out ahead.”
whats to dis/agree on? either it works for people or it doesnt, and we’re in no place to know that. but we can know this — if it worked out for everyone, Amazon would lose money on it and not offer the service. it works because it doesnt for some people. i may be one of them, this other guy may be one of them, etc…
I have no problem with the price increase. $100 a year for free two day shipping? Its worth that for Christmas time alone. And I use Prime Video when Netflix doesn’t have some shows (Like when Sports Night disappeared from Netflix in the middle of me rewatching it).
An extra $20 a year is totally worth it.
For an extra $20 per year, it’s completely worth the increase. I mainly use it for the shipping, but occasionally I’ll watch Amazon Video. $20 per year is a pretty small amount of money for the convenience. And besides, it’s less than I pay for my membership to The Loop.
I wonder how long before they go to tiered memberships. If you get this much shipped its $99, if you order this much per year you go up to $129 etc. Then they could add a tier for those that don’t want video streaming or a video only subscription.
My problem is that Amazon Prime has become this blob of services.
Started about seven years ago one December, when I was tired of going Christmas shopping. The “all-you can eat” two day shipping was a great deal, even if I never used it for the rest of the year (but of course, I do use it year round.)
I didn’t order video streaming services. I occasionally use it, but Netflix has most of the same stuff, and more. Since I use the Kindle app on iOS, and not an actual Kindle device, I can’t make use of the lending library.
What else is going to be added to Prime? And at what point will trying to prop up newer services by grafting them onto Prime hurt Amazon’s retail business?
Compare with Netflix’s two services: Streaming TV and DVD rental. Streaming TV for a while was added onto the DVD rental service. At least in this case the two services were related. And since they’ve separated them out (though I wish they hadn’t, I miss the unified queue.)
Unless Netflix starts becoming an online retail store, comparing it with Amazon Prime, is purely an apples and oranges comparison.