Amazon Prime, specifically the Video streaming library offered through membership, has always felt like a no-brainer. $100 a year for two-day shipping, cloud storage, the Prime Video library, and several other benefits, there probably isn’t a better package deal for so many bulk services anywhere on the web.
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But are consumers willing to pay more for the service? Is this Amazon’s first step towards raising prices across the board?
Amazon has long relied on razor-thin margins to destroy competition and offer customers the lowest prices on most products and services. But after the competition is gone, it seems likely that Amazon could then raise their prices to whatever they want, a pretty standard business practice.
They will be testing this in the coming months, with plans to increase Amazon Prime from $99 a year to $119 a year for all members. This means no subscribers will be grandfathered in under old pricing models, if your Prime subscription renews after June 2018, you’ll see a $20 a year price increase.
Based on how Netflix rarely sees an increase in cancellations anytime they raise prices, it seems fairly unlikely that Amazon will see any major loss of customers. Most people will probably complain online a little bit and then agree to pay the increased price. But now the question is how high can Amazon increase their Prime prices before people do actually start cancelling? $150 a year? $200 a year? $500 a year?