November 6, 2012
Amazon Prime Now Available As Monthly Subscription
Peter Suciu for redOrbit.com — Your Universe Online
Last minute holiday shoppers will now be able to get their gift purchases from Amazon in two days and only pay $7.99 for a Prime monthly subscription. This could be ideal for those who do the bulk of their online shopping for the holidays and don´t mind waiting an extra day or two the rest of the year.
On Tuesday the website HackingNetflix.com announced that Amazon began offering customers the ability to sign up for its Prime service and pay month-to-month, which was previously only available for $79 a year. The yearly subscription--which saves users about 20 percent ($16.88) off monthly subscriptions--will remain available.
"The new plan arrives just in time for the holiday shopping season, so customers who might not be interested in committing to a full year of Prime can try it for a couple months and (Amazon hopes) sign-up for the annual service," Charles King, principal analyst at Pund-IT tells RedOrbit.
The pricing was confirmed on the Amazon website, but no official press release was sent out, adding to speculation that this could be a test, possibly for the holidays to see if it peaks interest.
This is not the first time that Amazon has failed to make new features and services official via a press announcement; as the addition of the Amazon Lockers in Staples stores can attest.
The monthly option for Prime apparently began this week, and new users are offered the ability to “start your one month free trial.”
Amazon Prime customers receive free two-day shipping on many items from Amazon.com, and have the ability to “borrow” thousands of Kindle e-books at no charge. The free two-day shipping has long been the main draw, especially as orders above $25 have been free but often with three to five day shipping. Thus those who paid for the service did get their goods faster.
"I wouldn't be surprised if sign-ups for the annual Prime membership have been tailing off a bit. It's about right from a timing standpoint and, barring the addition of an overnight shipping plan, there seems to be few other bells/whistles the company can add to Prime to entice new members," King says.
The service thus was a draw at holiday time where buyers needed those items fast!
Amazon´s prime motivation in this might not be aimed just at holiday shoppers — even if the timing in advance to the upcoming Black Friday and Cyber Monday is notable — but also at upping the game in the online-streaming business, and taking on Hulu and Netflix. At present those are Amazon´s two chief rivals in the online-streaming business. Amazon Prime members have access to the free online streaming since February 2011, while access to Kindle book borrowing was introduced a few months later, in November 2011.
Online video content has become highly competitive. "It looks as though those services are both losing viewers so picking up free streaming along with two day Amazon shipping could make Prime pretty enticing to consumers looking for a new source of movies and video," says King.
Beyond looking to compete with streaming this could be a way to make Prime, which launched in February 2005, a little more cost effective. As DailyFinance noted, the service actually loses money when Prime customers purchase small ticket items, which resulted in Amazon paring back on Prime-enabled free shipping of those items.
Amazon´s new move could thus be one to compete for those wanting goods fast, as well as streaming video but also in making Prime a little more cost effective to boot.