Gadgetory

back amazoncom announcing it will hold a major press conference on sep tember sixth lots of speculation and what it may be unveiling but no one is saying for sure we will have more details for you as the information becomes available about that event but one thing is for certain that amazon prime is becoming a fast favorite among consumers who could blame them seventy nine dollars a year sounds like quite the deal for unlimited videos however prime costs are stacking at the company since 2005 shipping costs are up and whopping twenty-five percent for this company even streaming costs are on the rise media's exporter bid says for prime to become profitable amazon has to raise prices technobuffalo jon rettinger though couldn't disagree more he says you can't make the same mistake netflix did Porter really a price hike is required here well they've never made a penny of profit from prime and it was begun seven years ago as an inducement to e-commerce customers with free shipping and lots of other bells and whistles it's turned into a full-fledged video and TV screening project and a major threat to all of the other guys who are in that space starting with Netflix so John I mean we all remember what happened with Netflix if Amazon hikes rates these this be could this be a deja vu moment that we saw Netflix where the stock plummeted company lost business and you had so much backlash yeah absolutely could be catastrophic and once you know all the facts raising prices on prime makes very little sense first of all prime is growing by twenty percent per year and once a new member joins prime their average expenditures go from four hundred dollars to nine hundred dollars so they may be losing money on prime itself but they're making five hundred dollars per customer and they want this is a numbers game here every 1 million prime customers increases Netflix is total revenue by 1.5% there'd be no reason flem's isolate those users a simple economic supply and demand as they raise those prices demands going to fall with water in the head porter there are so many different ways that Jeff Bezos who is as smart a retailer as there is in this country can handle the increase in prices he first of all it can take the annual $79 and make it a monthly fee it's 650 a month and it's still a dollar and a half cheaper than net flow even if he had a 50 cent or a dollar per person and gave them a chance to opt out the way Netflix does they can also eliminate the free shipping bonus that the screaming customers get and that would immediately take the loss factor away from prime so I mean Bezos talked about prime during the last quarters results right Porter he said amazon prime is now the best bargain in the history of shopping that's not hyperbole that what hasn't changed since we launched Prime nice what he's using prime that prime is is another one of the new businesses that Jeff is starting on Amazon platform he leads the market in the UK and Europe with love which is a pure streaming netflix competitor and he's bashing bskyb and netflix in those countries he saw he changes his stance then that's gonna be a problem he just said you know that he's got to that he loves prime and it's a great bargain and there's big points being missed here as well there are many ways that he can reconfigure it because he's now got he's also bringing in very very major talent he's got deals in Europe and the UK with all of the major studios and he's bringing current blockbusters in which netflix doesn't have John what about state taxes for online sales at some point is this going to be common issue for Amazon and that's an excellent point amazon is going to have to start charging state taxes in certain states but what's going to let them do is create a local distribution centers so if quarters saying is correct Amazon's gonna have to raise prices to increase in sales tax and then raise prices again on Prime the consumers will not tolerate that and also he's making the assumption that consumers are going to tolerate perhaps a monthly price or paying for prime folks are used to system they have now and I think they're going to be extremely unhappy all on netflix once that results a Prime member spend a hundred and thirty percent more than regular customers I don't think Jeff Bezos wants to anger that population well and your thoughts on what they're going to announce that that big press conference they scheduled for September's exporter I think he's going to announce blockbuster new content and and maybe a a division of prime from the free shipping or the annual fee all right we'll leave it there German thank you very much we watching this we appreciate your time tonight