Subscription Mania: Amazon Offers Prime By the Month, But It’ll Cost You

| Editorial

Cash flow is king. Why wait a year for the next Amazon Prime renewal? That allows the customer to possibly fret about forking out the major expenditure of $99. Better to keep the money coming in regularly in digestible amounts. That was probably what Amazon was thinking when they introduced the new monthly plans. But you'll pay more for this luxury.


On April 18th, Amazon introduced two new subscription plans for Amazon Prime.

  1. Prime Video (movies & TV) only for US$8.99/month. ($107.88/year)
  2. Regular Amazon Prime with video, 2-day shipping. music, etc for $10.99 month. ($131.88/year)

This monthly pricing comes on the heels of the Netflix announcement that it is raising its basic rate for all customers by $2.00 to $9.99/month.

Amazon has posted a comparison chart showing the services and costs.

The thinking here may be that if customers are willing to pay Netflix a monthly fee, why not cash in on that psychology? To the extent that customers rationalize that the monthly fee is easy to pay and can be cancelled at any time, Amazon picks up a little extra money over the course of a year and evens out the cash flow somewhat. A good assumption is that a healthy fraction of the customers will never bother to cancel their subscription and replace it with the annual fee of $99.

The question remains: why would any moderately tech savvy family pay almost $109/year on the monthly plan and get just video when they could have it all for $99, paid once? And free 2-day shipping. Amazon must feel that they can reach a wider audience by offering subscription plans which always looks tempting and digestible.

Too many choices also means many different ways to make more money. It's always been true.

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