Are Amazon's monthly Prime subscriptions worth it?
Amazon (AMZN) has signed up more than 46 million subscribers to its $99 annual Prime membership plan, but it's now thrown a potential wrench into the program: The option for paying month-by-month.
Amazon's new monthly Prime payment program raises the question of whether a consumer is better off sticking with the $99 per-year rate, or jumping to the $10.99 per-month billing plan. Then there's Amazon's other new monthly option, Prime's video-only service, which costs $8.99 per month.
On the face of it, the value choice appears fairly simple, given that paying$99 upfront for a year of Prime brings down the monthly cost to $8.25. But there are reasons why a consumer might opt for one of the other monthly plans, which could actually end up saving them some money.
Frequent Amazon shoppers are going to be better off with the $99 annual option, of course. What does "frequent" mean? According to Consumer Reports, a customer would need to order 18 deliveries (with free two-day delivery) per year to break even on the annual price.
Then there are the Prime extras, such as unlimited streaming to a large library of TV shows and movies and Prime Photos, which provides unlimited photo storage on Amazon's cloud drive. Those fringe benefits may justify the annual $99 charge.
Here are four types of shoppers for whom switching or signing up for one of the monthly options may make more sense:
Consumers on a tight budget. Paying $99 can be a stretch for some households on a tight monthly budget. For those shoppers, it may make more sense to pay the slightly higher per-month subscription price. Just remember that Prime members tend to spend $1,500 annually at Amazon, or more than twice what non-Prime customers spend, so be careful about keeping a lid on spending.
The big holiday spender. People who turn to online shopping at the holidays but don't order from Amazon during the rest of the year may want to consider the monthly option. That's because the monthly plan can be turned on or off month-to-month, which allows big holiday spenders to pay $10.99 for Prime service during December, and then shut down their subscription in January.
Streaming video fans.If you love streaming video but don't care about shopping for books or other goods on Amazon, then the $8.99 monthly Prime video option may make sense. It's also $1 cheaper than Netflix, which may appeal to some. Video fans who also order through Amazon may want to pay the extra money to upgrade to full Prime membership, however.
Gamers waiting for a new release. Amazon now offers 20 percent discounts on pre-ordered and newly released video games, which means that gamers who are waiting for a specific title release may want to sign up for a Prime membership during the release month, according to Consumerist. But since game releases can get pushed back, this option may not play out the way some gamers would hope.