I can now report that Amazon is going to raise the cost of Amazon Prime to $99 a year. A reader has forwarded the email he received from Amazon which conveyed the bad news:
We are writing to provide you advance notice that the price of your Prime membership will be increasing. The annual rate will be $99 when your membership renews on December 16, 2014.
Even as fuel and transportation costs have increased, the price of Prime has remained the same for nine years. Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million. We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners’ Lending Library.
I haven't received this email yet; have you?
Sidenote: Here's how you can get another year of Amazon Prime at the old rate.
But now that the price hike is here I don't think that is going to happen. Speaking as a consumer, I can say that I will probably still renew my Prime membership.
Amazon successfully psyched me out by hinting at a $40 increase, and then only increasing the price by $20; they've created the impression that it could have been worse and as a result made the actual price increase more palatable. That was a subtle trick on the part of Amazon, and it was well-played.
And frankly, I still see the $99 as a good value - to me. A Netflix or Hulu Plus streaming subscription costs $7.99 a month or $95.88 a year, and while those services might offer more content I also frequently use the Amazon Prime free two day shipping option. I have probably saved far more in shipping costs over the years than I spent in paying for a Prime membership, and I expect that I will still come out ahead when the price goes up.