Amazon’s “monopoly”

subscribers of Amazon woke up on Tuesday to an email informing them of a raise your prices in Spain, which they justify by the increase in the cost of the service due to inflation. In concrete terms, the change will take place in the renovations that will take place from the beginning of September 15, 2022, with an increment of one euro in the monthly tariff of 3.99 to 4.99 euros and 13.90 euros per year , What’s going on from 36 to 49.90 euros. The multinational is testing this strategy to protect itself against the possible losses that some of its users could make in the face of the general rise in prices, which is forcing many pockets to restructure the list of priorities.

A priori, a price increase would lead to a noticeable loss of customers in any company, however, in the case of Amazon, this process does not have to take place, since its wide offer has no direct competition. It is therefore to be expected that the company has kept this aspect well in mind when evaluating the general increase in its prices and that the balance has weighed more heavily on the increase in income thanks to customers who do not want to give up their services. in exchange for losing others who do not want to face this increase in up to 38% of the annual membership fee. However, trying to confirm if this has been the case, this outlet has not received a response from the company.

This crisis is expected to have a different impact on the sector than, as the one generated by Covid-19 has already done, which broke a record number of subscriptions to digital platforms and demand for shipments has skyrocketed due to increased online shopping. On the other hand, with the “new normal”, video platforms have ceased to represent one of the few entertainment channels, which can compromise subscriptions to allocate them to other activities, especially among younger people. Precisely, students are among the pockets hardest hit by the current crisis and Amazon Prime is offering them a special rate. First student is aimed at university students and offers a halving of the price, but this will also experience a price increase, since it will go from 1.99 euros per month to 2.49, while the annual fee will increase from 18 euros at 24.95.

Amazon Prime includes in the same price the fast parcel service, the series and film platform, Prime Reading ebook library, Amazon Music music app, priority access to flash deals, Twitch perks, and unlimited image storage on Amazon Photos. So, although there are different companies that provide these services in a differentiated way, the American giant seems to offer the best conditions in exchange for this fee. In the package field, El Corte Inglés More offers a flat rate for “home” or “same day” shipments for 19.99 euros, while the audio sector is led by Spotifywhich in recent years has integrated the podcast format into its offer with a price of 9.99 euros per month.

However, streaming platforms can be one of the most interesting sectors for Amazon in Spain, since according to the latest study on pay TV and OTT (over the top) applications carried out by Barlovento Comunicación , 83% of Spaniards have access to paid content, about 32 million and 58.3% of them say they subscribe to at least two platforms. According to this same study, the scope of Amazon Prime in Spain would be very close to its main competitor, Netflix, which monopolized 59.9% of the national population. against 54.8% of Amazon Prime. Moreover, in this case, the price is also an advantage for the potential customer, since the monthly rate of Netflix varies from 7.99 to 17.99 euros depending on the number of devices on which Netflix content can be consulted simultaneously.

The increase announced this week is the second since the arrival of Amazon Prime in Spain, the first occurred in 2018, when its customers experienced an increase in the amount of the annual subscription from 19.95 to 36 euros, which was justified at the time by the increase in services offered under the Prime tariff. However, this rate will continue to be lower than that offered in other neighboring countries, since the increase will also affect other European countries. This is the case of France, where the fee goes from 49 to 69.90 euros or Germany, where it will go to 89.90 euros (it was 69) while in Italy the price will be the same than in Spain. Across the ocean, the company also announced a US price hike last April, which went from $119 to $139.

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