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November 08, 2012

Amazon Offering a $7.99 Monthly Charge for Prime

By Oliver VanDervoort, Contributing Writer

The holiday shopping season is about to start really heating up and Amazon is getting a jump on its competitors. The online retail giant has announced that it will be offering up a Prime membership for $7.99 a month. While Amazon will be able to offer up low priced shipping for all those people looking to get their Holiday gifts online, this is actually a two pronged approach to their Prime business. While Prime had been a yearly charge, going monthly will allow the company to take on competitors like Netflix and Hulu (News - Alert) Plus.

The access to an ever growing list of movies and television shows is just one aspect of having a Prime membership. For those who are busy looking for presents for their friends and family, being able to also watch streaming video is a nice side effect. Prime members are able to get free two day shipping for all of their orders and with people doing more shopping online than ever, that can be a huge incentive.

Image via Shutterstock

Some industry analysts believe that offering up this particular service will actually be a money loser for Amazon. That is one of the things that make the retailer such a successful business; they are willing to lose money in the short term, in order to make more money in the long term. 

People who are going to be using Amazon just for a couple of months will be saving a pretty penny, but if they don’t cancel their Prime accounts after the season, they will end up paying more. 

The annual charge for Prime is $79. That works out to about $6.58 a month. In addition to having access to streaming video and free shipping, users will be able to gain access to the Kindle Loaner program which just started up a few months ago.

Edited by Brooke Neuman
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