If Amazon substantially raises the cost of Amazon Prime, could there be a customer revolt like that experienced by Netflix?
This post comes from Louis Ramirez at partner site DealNews.
Just days after Amazon broke the news that it may raise the cost of its popular Prime shipping service by $20 or as much as $40, consumers have taken to the Internet to voice their opinion. In a DealNews survey, 65 percent of readers polled said they would not pay more for Amazon’s two-day shipping service.
While many found it hard to justify a higher price, others claimed a lack of new content on Amazon Instant Video, coupled with the price hike, as reason enough to quit.
A Netflix scenario in the making
The last company to create such a commotion over a price hike was Netflix back in September of 2011 when it said it would split its digital and DVD-only services into two companies. Thanks to social media (and a lot of subscription cancellations), Netflix quickly retracted its plans.
It’s still uncertain whether Amazon will indeed raise the cost of Prime, but one thing is for sure — it hasn’t won over public support. As one of our readers pointed out, “Some people, slapped with a 25 percent to 50 percent increase, can become offended. Why risk the same type of revolt that Netflix had?”
Pile this on top of last year’s flurry of missed shipments and Prime delays, and some consumers might start wondering if they need the service at all.
Tiered pricing a possible solution?
While the overwhelming majority of readers said they would cancel their Prime membership should a price hike occur, a few readers contemplated keeping their subscription if Amazon were to separate its on-demand video service from Prime. With tiered pricing, consumers who want both on-demand video and Prime shipping would pay the higher rate, while those who want just two-day shipping could potentially stay with their current rate.
Other readers said they wouldn’t mind an increase as long as the total price remains at or under $100 per year, or if it would grant them further value like same-day delivery on select items or a richer library of streaming content.
Though we’re still years away from Prime Air, Amazon’s drone shipping service that promises deliveries within minutes after purchase, the e-tailer does offer same-day delivery on certain products in select cities, which could sweeten the Prime price tag.
As it currently stands, though, the majority of shoppers are unwilling to subscribe to Prime if it costs more than $79, and only a meager 12 percent said they would indeed pay more if necessary. (An indecisive 22 percent just said “maybe.”) Thus, Amazon will have to tread lightly as it considers what to do about Prime pricing.
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