Originally Posted by 31 Flavas
Got news for you buddy. Amazon Prime was $80 before the Movies and Books were added -- for free. So it's just a convenient argument on your point that you are now "paying" for them. I'm going to believe "increased fuel and transportation costs" way before I believe, the argument that you are now going to make, that this price increase is just a ruse to charge for these e-books and the video service.
Free 2-day shipping is either worth $99/year to you or not.
So you think that Amazon trying to start a competitor to Netflix (that charges customers $10/month) and Hulu Plus (that charges $8/month) isn't increasing Amazon's costs? You think the streaming rights to all those movies and TV shows, as well as lending rights to the ebooks don't cost them anything? Now Amazon is starting to get their own exclusive shows too, you think that doesn't cost anything? These things are costing millions of dollars, and I am way more convinced that they are the actual reason for the increase not shipping costs.
As others have pointed out, if shipping costs were the driving factor why aren't they getting rid of free shipping for non-prime members, or at least raising the minimum purchase level to qualify again? Many online vendors make you have to order $50 or $100 in merchandise before you get free shipping Amazon is only $35.
The more I think about it, the more sense it makes for Amazon to split the two offerings. The way it is now they have to be losing quite a few members over $20 a year. If they had instead split the offerings I would bet that the majority of Prime members that use the streaming service would have been more than happy to pay an extra $20 a year to keep that service. After all that is only $1.67/month, way cheaper than Netflix or Hulu Plus. Not only that but I bet a ton of new customers would have signed up for the streaming service that wouldn't normally be Amazon Prime members. Lots of people don't like to shop online, or don't do it enough for $100 a year membership to be worthwile, but $1.67 a month for streaming content might interest them a lot.
Heck, Amazon probably could charge quite a bit more for stand alone streaming only. $30 a year is only $2.50 a month, still a great deal compared to Netflix and Hulu+. $50 a year is just a little over $4 a month, still about half the price of the competitors. Then they could offer a discount to members who get both. Say streaming is $50 a year by itself, but for $100/year you get streaming and Prime shipping.