Amazon Holds Price of Prime at $10.99

By Douglas A. McIntyre Updated Jan 12, 7:24AM EST · Published Oct 9, 6:30AM EDT

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As Netflix Inc. (NASDAQ: NFLX) said it would raise prices, Amazon did not mention it is not. However, the price difference may help Amazon.com Inc. (NASDAQ: AMZN) build its Prime services, which include streaming video.

Netflix will raise the prices on some of its streaming services from $9.99 to $10.99 and others from $11.99 to $13.99. These services allow viewing on more than one screen. They will not be levied for current customers.

Amazon’s primary rival in streaming media remains Netflix, which continues to build its arsenal of original content. Amazon entered the same business, but much later. Each company will invest tens of millions of dollars into the original content business.

Amazon has several edges over Netflix, and among them is price. Amazon’s Prime services continue to be available for $10.99. However, it includes streaming media, special offers on products and services at Amazon.com, free shipping, over 2 million free songs and unlimited photo storage. As a major by-product for Amazon, studies show Prime members are much more likely to buy goods and services at Amazon than nonmembers are.

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The increase in Netflix fees and Amazon’s decision to hold Prime fees where they are may not gain either company subscribers. This depends on how closely people watch the prices they pay for streaming media. Shifting from one to another involves some effort, and for $10, $11 or $13 a month, most people may not bother.

If price is an element of which service people use, however, Amazon’s decision to hold its price may help its market share in streaming media considerably.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.