Price of Amazon Prime May Jump To $119 a Year

colinneagle writes "Amazon CFO Tom Szkutak hinted during the company's earnings conference call [Thursday] that we might see an increase to the company's popular Amazon Prime service. As it stands now, Amazon Prime costs $79 per year and offers users free shipping on millions of items, free book borrowing for select Kindle titles, and last but not least, free streaming to the company's video on-demand service. Going forward, Amazon may increase that pricepoint to either $99 or $119. That's a rather significant price increase, but it's important to keep in mind that the price of Amazon Prime has remained the same ever since Amazon first started the program nine years ago." How many products do you use that haven't increased in price for that long?

Comments

how many products?

[gl4ss]

hmm lets see.

isp is cheaper now than 9 years ago.
the tv I got at back home I could not have afforded 9 years ago.
my mobile subscriptions are cheaper than 9 years ago. I can order stuff from china cheaper than 9 years ago(transportation costs).

Re:how many products?

[Anonymous Coward]

I spend way too much on living. I'd save lots of money if only I could shake my food addiction. I tried going cold turkey but then I developed an overwhelming craving for cold turkey.

Re:how many products?

[MickLinux]

Generally speaking, we are in deflation, not inflation. So as the commenter correctly points out, a lot of things are decreasing in price.

Here's the problem: our wages are also decreasing.

Here's another problem: a lot of things -- especially thing which we are *legally required* to buy from one source-- are increasing in price. So housing, electricity, union leadership, health insurance, the cost of government, public schools, taxes, bailouts... all are crashing through the roof.

Basically, if the purveyor thinks he has a captive market, he's grabbing everything he can.

But, that being the case, the appropriate question is not as the original headline, "how many things haven't increased in price in that long", it is instead, "how many things, when they increased in price 25- to 50-%, did you have the option to not buy, and still continued to buy?"

Typically speaking, when something went up in price 25- or 50- percent, I stopped buying it. That is, my purchases went to something like 5% of what they had been before. Often, I stopped buying it completely, because I had the incentive to find better alternatives. Once I had the better alternatives, I was done.

Here's a better question: in today's era of retail cannibalization, how will Amazon's market share hold up if they increase prices?

Re:how many products?

[Lumpy]

Mostly because Newspapers only hire no talent hacks to write for them that have no education at all in what they are reporting.

newspapers killed themselves, they deserve the horrible lingering death they are enjoying.

Re:how many products?

[TheGratefulNet]

Please name ONE thing that is still the same quality as before but is lower in price.

m job ... ;(

have not had a raise in a long long LONG time. essentially I went backwards about 10 yrs ago and never caught back up again with the cost of living. my software and hardware skills are as good (or better) than 10 yrs ago but I'm paid LESS, overall.

Re:how many products?

[dgatwood]

The thing is, 99% of the time, I don't care about getting things quickly, but I joined Prime last summer because I needed to buy a bunch of things for a trip to Europe, and I wanted to make sure stuff arrived in time. I initially planned to cancel it after a year, but I've tried the Prime Instant Video, and now I'm debating.

Either way, if it goes over the price of Netflix ($96 annually), I can't imagine choosing to stay with Prime over Netflix. The two-day shipping benefit is only significant if you would ordinarily have paid for two-day shipping. Otherwise, it's just not a very enticing perk unless you know you're going to need to buy a lot of gear in a short period of time. And that doesn't lead to continuous customer revenue. It leads to people buying it for just long enough to get the job done, then dropping it, which raises the cost for Amazon, which means they'll raise the price, and then even fewer people will buy it when it isn't absolutely necessary.

What really matters is the streaming service. And in that regard, Amazon's offering doesn't compare too favorably. Netflix has more content, and fewer encoding problems. There was one episode of Buffy where the video was jerky on every device I own, and I've watched a few TV shows where Amazon incorrectly encoded 16:9 content as letterboxed 4:3 content, so I get four black bars on my TV. That was excusable ten years ago. Now, it's just negligent.

And the Netflix iOS app actually works over cellular connections, unlike Prime, which deliberately refuses to work. That means if I were using Netflix, I could watch stuff on my phone while away from home as part of my unlimited data package. With Amazon, I have use my laptop, where I have a tethering data limit of about three hours of video.

So I've been debating whether to continue Prime even at $79 or jump to Netflix for only a few dollars more. Raise the price to $119, and they'll make my decision a lot easier.

Re:how many products?

[93 Escort Wagon]

Yeah, right now at $79 I just keep letting my Prime membership auto-renew because a) I'm lazy, and b) it does save me a little at Christmastime. But their video catalog is pretty limited - much of what I've tried to watch is TV shows where, it turns out, they've only included a few episodes you can access without paying more. And their Kindle Lending Library is likewise pretty limited - it's "all the Harry Potter books plus hundreds of authors you'll never want to read".

Really, even at $79 it's hard to justify. There's not a whole lot I *must* get in two days...

I'll probably just not renew this time around - free ground shipping is good enough. And, if they further limit that, I'll probably start frequenting other online stores. Pretty much everyone is on the web now; I just currently default to Amazon because of the "free" shipping.

"Sumsing vwrong here!"

[Anonymous Coward]

"Sumsing vwrong here!"

http://www.wired.com/business/2013/03/amazon-prime-could-soon-cost-next-to-nothing/

Re:It doesn't offer free shipping

[mysidia]

Personally I love prime, but at $129 I would actually count my purchases

Prime makes financial sense if you make on average more than 2 orders a month items that would be covered by prime that would not be eligible for free shipping, at $5 shipping.

The streaming videos and free upgrade to 2 day shipping on prime eligible items: add additional value.

I suppose what would be interesting is if they started offering a "Prime Lite" for $60 a year --- with no streaming videos, no 2 day shipping, but free standard shipping on all normally prime-eligible items fulfilled by Amazon.

Re:worth it to me, with the free shipping and vide

[dreamchaser]

Your cow-orkers don't steal your packages, don't break your packages, and don't bully you for receiving packages? Must be nice not working among humans.

If that is happening to you then you're the one not working among humans.

Re:worth it to me, with the free shipping and vide

[gnasher719]

This is getting common enough that some companies are starting to complain, though. If a few people do it occasionally it's no big deal, but if 500 employees are each receiving multiple packages a week, it starts becoming a significant added burden on the corporate mailroom.

The relationship between company and employees, at first approximation, is that employees come to work, and the company pays them money. In a better approximation, employees do useful work to advance the purposes of the company, while the company does things to keep employees happy. Adding a person to the mailroom is a cheap way to make 500 employees a lot happier, so they will work for you instead of someone else if everything else is equal.

Makes sense from a shareholder PoV

[EmagGeek]

This makes perfect sense from a shareholder point of view. Raising the price to $119 will decrease the number of Prime members, thereby decreasing the cost of providing the Prime service, but the people who stay with Prime will likely more than pay for those who leave. So, it's a win-win for shareholders and Amazon.

Brilliant strategy: Pay more for less

[rayd75]

I find it interesting that this comes just as Amazon has fallen in love with hybrid shipping services such as UPS Mail Innovations and FedEx SmartPost for Prime delivery. These services utilize UPS or FedEx only to the destination city where your package is then handed off to the USPS for delivery. As a result, Prime "guaranteed" 2-day delivery has become "often 2-day" or "occasional 2-day" ...and now, they feel like this is worth more? Wow.

Oh, they still haven't dropped the magic word "guaranteed". Their offering to satisfy the guarantee is an additional month of inconsistent, slower than stated service.

If only Prime were a premium service...

[SavvyPlayer]

As a Prime member, for every non-prime eligible item I find, I look for a Prime eligible counterpart. The price for the counterpart is _always_ about $3-5 more expensive, usually by the same amount as the quoted shipping price on the non-Prime eligible item. So what we are getting here is the 2-day upgrade for free, not the entire cost of shipping. Most of the time, 2-day vs. 4-day shipping makes no difference to me.

We do occasionally stream Prime content, but the vast majority of titles on Prime are also on Netflix. If I could cancel my Netflix subscription and replace with Prime, the $120 pricepoint might not look so steep, but alas, it often seems Amazon's library is only about 25% the size of Netflix, so that's not an option.

So as it stands, I feel I am not really getting $80 in value from Prime as it stands. $120 with no improvement to the service is out of the question. I like the idea of a premium Amazon service, it just needs to actually _be_ premium.

Re:Why Prime?

[bill_mcgonigle]

Prime is for the people that must have what they bought now. Whatever happened to delaying gratification?

You don't go to stores? Prime is to replace driving to do store shopping, not getting a book you will read next month. Need an odd concrete anchor bolt you can't find at the little hardware store or Home Depot? Just get it on Amazon and save the hour and a half drive to the specialty concrete yard

Our washing machine died, and I paid $4 to have the part here the very next day. Sears was a week plus shipping and double the price. What benefit would I have gained by waiting a week to fix the washer?

Re:It doesn't offer free shipping

[Lumpy]

Amazon punishes people who use free shipping, they will refuse to process the order until there is a whole semi truck full going to the section of the state you are in, I have had an item sit for 7 days before they shipped it. It's the scammy Fedex Post they use, Fedex delivers a semi truck to your state region post office then they carry the packages off to the cities around it. If your timing sucks it can be up to 10 days before it ships.