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Jacking up Amazon Prime prices could be a huge mistake

Published Feb 12th, 2014 3:15PM EST
Amazon Prime Price Increase

People may love Amazon Prime, but Amazon shouldn’t take that love for granted anytime soon. The Wall Street Journal points us to a new survey conducted by Consumer Intelligence Research Partners showing that while most Amazon Prime customers plan on renewing their subscriptions right now, that number would drop significantly if it meant paying between $99 and $119 versus the $79 annual membership they pay today. According to CIRP’s survey, 40% of Prime customers said they would “definitely” not renew their subscriptions if Amazon hiked the price all the way up to $119 while less than half said they would “probably” or “definitely” renew their subscriptions if Amazon raised prices up to $99.

The Journal points out that UBS, which partnered with CIRP on its latest survey, says that it’s rethinking its position on the wisdom of raising Amazon Prime prices to such an extent.

“Our survey results call into question our prior views about the value that a broad set of consumers are applying to the current iteration of Amazon Prime,” UBS writes in a research note it released on Wednesday. “If Amazon were to raise Prime fees, such a fee increase might need to be accompanied by either a) a higher level of value in the service offering (additional media content, streaming music and/or Fresh (supermarket) offerings) and/or b) an increased level of marketing around the perceived value of Prime to the general public.”

Amazon first floated the possibility of raising Amazon Prime prices during its most recent earnings call in late January.

Prior to joining BGR as News Editor, Brad Reed spent five years covering the wireless industry for Network World. His first smartphone was a BlackBerry but he has since become a loyal Android user.