Marco Arment’s take on the Amazon Prime price hike

Marco Arment is a co-founder of Tumblr and the creator of Instapaper. This is a bit of a rant, but there’s logic at the core of Marco’s argument.

Maybe the reason Prime economics have become tricky is because Amazon bundled in a video service nobody wants since 2011, leveraging one business’ extreme success to juice the numbers of one that’s faring poorly against its competitors. Netflix charges $95.88 per year for a similar service. How much of Prime’s price hike was really to help pay for the video service that’s just a tax on Prime members who have never used it and don’t want it?

This is a classic business problem. How do you distinguish a product that is a drag on revenue from a product that has yet to blossom?