That of the analyst Video Services Dashboard estimated that in the first quarter of 2021, 77.3 million US households were members of Amazon Prime, and about 71% of them watched Prime Video. He advertises that Amazon Prime Video is one of the many benefits of an Amazon membership, but Amazon, like its competitors in the OTT space, also invests in original content offerings to keep its subscribers engaged, encourage new subscribers and attract cord. – cutters and the growing new cohort of service hoppers. He also noted that the growth came just as the service increased its price.
“Amazon’s Prime price hike, the fourth in its history, comes barely a month after Netflix raised its fees, while Hulu raised prices last year,” said Eric Sorensen, senior analyst at Parks Associates. “Amazon also debuted its Lord of the Rings trailer during the Super Bowl this year, so the company obviously hopes the value it brings to the content will outweigh any consumer reluctance to pay higher prices. With inflation and the cost of content rising, we’re likely to see more providers start to slowly increase their subscription prices, trying to find that balance between revenue growth and consumer value.
Parks also noted that many OTT services ran Super Bowl ads this year, promoting not just one title but the range of their content library, to remind viewers of the total value of each subscription. The analyst considers Amazon’s price increases to have been fully considered as part of its long-term strategy to generate more revenue from subscribers over time. While he said supply chain and increased shipping expenses are being passed on to customers, Parks considers it doubtful that Prime members would object to a twenty-dollar-a-year increase. which would be the first of its kind in four years.