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How Amazon got away with jacking up the price of Prime

An employee stacks items to be shipped at the Amazon.com fulfillment center in Phoenix, Arizona.
David Paul Morris | Bloomberg | Getty Images
An employee stacks items to be shipped at the Amazon.com fulfillment center in Phoenix, Arizona.

How did Amazon—which announced a $20 increase in the price of its premium Prime service in January—escape the fate of Netflix, which lost 800,000 subscribers when it tried to boost its subscription price in 2011?

The secret is probably in setting expectations, according to a report in qz.com. Because Amazon initially suggested the price increase would be higher than it ultimately turned out to be, customer backlash was likely more subdued—a theory which some analytics bear out.

Qz.com has the whole story.

—CNBC.com

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  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

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  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.

  • Co-CEO, Revere Digital; Co-Executive Editor, Re/code; and Co-Executive Producer, The Code Conference. Re/code is part of the CNBC network.