Amazon hasn't increased the price of Prime since it debuted nine years ago. The idea of a price increase for its competitor makes Netflix happy.
How hooked are you on Amazon’s Prime service? You know, the one that gives you free two-day shipping on most products, free Kindle titles to borrow, and unlimited streaming video of movies and TV shows?
Amazon may test your loyalty with a price bump, adding between $20 and $40 to the $79 U.S. cost, reports USA Today.
“The company said it has not raised the price on Prime in the nine years since its launch, even though shipping costs have increased and it has added new services, such as video streaming,” reports The Associated Press.
So why boost it now?
Says USA Today:
Amazon said … that its net shipping costs jumped 19 percent to $1.21 billion in the fourth quarter. That was 4.7 percent of net sales, up from 4.5 percent a year earlier. Expenses like this contribute to the company’s wafer-thin profit margins, which have been a concern on Wall Street for years.
The proposed increase has met with celebration at Netflix, according to CNET.
We recently reported that Netflix is looking at price restructuring.
And because, as CNET reports, “online video subscribers are a price-sensitive bunch,” Netflix is hoping that the increase — which would for the first time push the monthly cost of Prime higher than that of Netflix — will drive customers to it.
Even at the low end, it still would raise the monthly cost of Prime above the monthly rate of Netflix. Netflix costs $7.99 a month standard; a $20 increase to the Prime yearly membership would boost its monthly breakdown to $8.25.
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