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Needham's Laura Martin: Amazon Prime Price Increase Won't Affect Netflix, Roku

Needham's Laura Martin: Amazon Prime Price Increase Won't Affect Netflix, Roku
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Goldilocks, R. I. P. (Part 3) (Seeking Alpha), Inc. (NASDAQ: AMZN) announced Friday it was raising the price of Prime’s monthly membership 18 percent.

While the annual membership will remain at $99 and government assistance membership at $5.99, monthly payments of the standard program will rise from $10.99 to $12.99, amounting to about $156 per year. Student programs will also rise from $5.49 to $6.49.

'Other Services Unaffected'

Although potentially prohibitive to lower-budget Prime users, Prime Video consumption isn’t expected to hurt. In other words, the hike isn’t seen to benefit streaming competitors such as Netflix, Inc. (NASDAQ: NFLX) and Roku Inc (NASDAQ: ROKU).

“I guess I would argue I think most folks pay for prime owing to free shipping,” Needham analyst Laura Martin told Benzinga. “If they don’t think of it as a video service, then other competitive video services should be unaffected.”

Those who do frequent Amazon solely for its streaming service also have the specific option of Prime Video memberships, which will remain at $8.99 per month. By comparison, Netflix offers its streaming between $7.99 and $13.99, while Roku players range $30 and $100.

While Video market share is expected to be sustained, general membership may suffer. An October poll found that nearly half of Prime members would not renew if the annual cost rose to $150.

A concession of shoppers may bode well for the retailers Amazon has poached from.

Related Links:

Cramer: John Malone Made Bullish Case For Netflix, Amazon

Everyone Over Time Is Going To Shift Toward Streaming

Image Credit: [Public domain], via Wikimedia Commons

Posted-In: Amazon Prime Amazon Prime Video Prime VideoAnalyst Color News Top Stories Exclusives Tech Best of Benzinga


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