Monday, April 18, 2016

Amazon Prime Has Unbundled

For those cord cutters who don't want to pay $99 a year for Amazon Prime and its entertainment video package, Amazon is offering a monthly rate instead.  For only $8.99 a month you can subscribe to the service with the ability to cancel anytime.  And according to Techcrunch, "You can also choose to subscribe to Prime for $10.99 per month. You get access to expedited shipping, Prime Video, Prime Music, the Kindle Lending Library and probably a bunch of other stuff that I’m forgetting."  If cash flow is your issue, the new Amazon offering provides a smaller monthly fee. 

But if a $99 yearly cash outflow doesn't hurt your pocket, the simple math proves that buying the annual membership is the better value of about $10 for the video only package, $32 more for the full package of Prime services.  Heck if Netflix offered an annual discounted payment, they likely would find a strong conversion by existing subscribers although a lower revenue stream. 

Will the new payment structure encourage new subscribers to try the Amazon Prime service?  There is certaily no savings if all you wanted was the video offerings.  Given the pricing, it seems like you might as well pay the higher fee and add books and music to the mix. 

I am not an Amazon Prime customer.  I don't buy that much from Amazon to see value from the expedited shipping and have yet to find a must-have show that would drive me to purchase.  I do believe the ultimate driver for Amazon Prime is geared to those that utilize them frequently for purchases.  The entertainment library is the added value to the package.  I would love to see a comparison of Amazon Prime to Netflix and Hulu for number of monthly streams and hours per household utilized to see how each service is treated among its subscriber base.  Given the proprietary nature of the business, I doubt that info will ever be shared willingly. 

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