I went off yesterday – twice – about Amazon’s decision to convert Prime Video to an advertising-supported platform; you’ll only be able to watch commercial-free if you pay an extra $36 a year (which makes it a de facto Prime membership fee increase). I think this represents a lack of loyalty on Amazon’s part to its best customers.
One MNB reader responded:
When I saw the news about Amazon charging Prime customers an extra $2.99 a month to avoid ads, two thoughts came to mind.
1) KC’s column is going to be must-read on Monday. (did not disappoint)
2) I thought of a quote from the movie adaption of Ready Player One, set in a dystopian future where a single company had control over the online VR metaverse that replaced reality as the place where people spent the majority of their time:
“We have determined that we’ll be able to fill 80% of the user’s display with advertising before inducing seizures”
That was the CEO antagonist Nolan Sorrento talking to his board of directors.
Sounds like something Andy Jassy would be saying about the FireTV or Fire Tablet interface…they’re getting unusable.
At some point, it would be irresponsible to keep paying Amazon to be their real prime product (eyeballs).
From another reader:
Listening to your points this morning regarding providing deference to best customers is interesting in a couple of ways.
First, we have already firmly established in the food industry the lopsided contributions that best customers make vis-a-vis casual customers. Yet, your point is many retailers still do not operate with that mindset, despite have all the data they need to justify it.
Secondly, providing this deference is not always about money. It’s about recognition of a relationship and how promotions and price increases are communicated to those that drive the majority of the sales and profits for the enterprise. Some companies like AT&T, actually boast that their most loyal customer mean nothing to them as EVERYONE gets their best deals. While this might be a great short term marketing position for attracting new customers, over time, AT&T and other retailers who ignore (or even insult) their best customers, should expect dealing with customer attrition much more than their more loyalty-minded competitors. Good stuff.
Thanks.
From another reader:
This sounds like the same convention that cable companies and phone companies use. Lure you in, grab your loyalty and then increase your price each year. I like a tiered approach. If you just want the advantages of quick shipping one price, you want shipping and streaming another, just streaming (weird choice unless there is a series that interests you) another price. My favorite is leave as is. I will really have to think if Prime is worth the investment if the price keeps increasing and ads are added to my streaming.
From MNB reader Rich Heiland:
It seems like only yesterday – actually it was last Friday – that I commented on your reporting of Amazon’s insensitivity to customers by including One Health in Prime. Now comes charging for ads within Prime. I have a simple position on this. I pay the current price to avoid ads within Prime Video; same with Netflix. In essence, I feel now I would be charged twice. This has caused me to think. I really don’t need the free shipping. I have gotten lazy.
For most of what I get on Amazon, I could go to a local store and support local jobs, even in a big box. I have to think the cost of gas to do that would be offset by the waste in packaging created by Prime. Could I live with Prime on TV? Sure. I grew up when we only had three channels and an antenna on the roof. I think what I would miss most would be the books I buy from Kindle, but guess what? I can get most of those as e-book loans from our local library.
There is a breakpoint, or a shark-jumping moment, for any product or service. I wonder if Amazon is getting near that point? It’s got me thinking about continuing on.
And from another reader:
I am experiencing a similar feeling with the airline frequent flyer program I use. Been a good customer for ten years, and still flew regularly as the pandemic was winding down. Now that status program is changing and I need to pay more to keep what I have. I see Amazon is doing a similar thing with their ad-free increase.
I think the issue is in both cases that they know who their best customers are, but they feel those best customers are not likely to leave, and would be willing to pay such an increase. This is similar to when a business offers an incentive to new customers that their existing and loyal customers do not have available to them. Unless the result is a net loss of revenue by losing customers (doubtful in either case), I suspect it is another cushion being turned over looking for extra money.
MNB reader Mike Freese wrote:
Amazon should at the very least grandfather in current Prime account holders and not change the current “No Ads” on Prime Video without charge.
That’d be nice. But I wouldn’t hold my breath.
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