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Consumers Say No to a Higher Priced Amazon Prime (Update 1)

Stocks in this article: AMZN NFLX COST

This story has been updated from 9:36 am EST to include an infographic and additional information at the bottom.

NEW YORK (TheStreet) - Roughly 70% of people say that they don't think Amazon Prime, the free two-day membership shipping service from Amazon (AMZN - Get Report) is worth it at a higher price.

According to a nationwide telephone survey conducted for TheStreet by GfK, 70.1% of respondents said no when asked if they thought the service was worth having at a higher price, regardless of whether they currently use it.

The survey polled roughly 1,006 random respondents between Jan. 31, 2014 and Feb. 2, 2014. Just 13% of the sampling currently subscribed to Prime.

Amazon said last week that it was considering raising the price of the nine-year-old service to $99 to $119 from its current $79 on its fourth-quarter earnings call. Amazon Prime also offers members unlimited instant streaming of movies and TV shows, books through the Kindle library and special offers.

The price hike would be the first since launching the service. CFO Tom Szkutak blamed rising fuel and shipping costs combined with the fact that more customers are using the service these days. He did not give an exact time on when.

"Even as fuel and transportation cost have increased, the $79 price has remained the same. We know that customers love Prime as the usage of the shipping benefit has increased dramatically since launch. On a per customer basis, Prime members are ordering more items across more categories with free two-day shipping than ever before," Szkutak said on the call.

"With the increased cost of fuel and transportation as well as the increased usage among Prime members we're considering increasing the price of Prime between $20 to $40 in the U.S.," he said.

Digging deeper into TheStreet's survey numbers, of the 12.8% who said the service was worth it to them at a higher price, respondents were split evenly between male and female.

Broken down by age, people who were ages 25 to 34 who were most likely to say that Prime was worth it at a higher price, making up 23.2% of those who said yes compared to just 7.5% of baby boomers, aged 65 and over, even if they didn't currently pay for Prime.

When broken down by income, those respondents making between $50,000 to $74,900 and those making above $75,000 were equally likely at 16% respectively to answer that the service was worth it at the higher price.

Approximately 13% of the survey respondents said they are subscribed to Prime. Of those, 23.4% said they would pay a higher price for the service.

Amazon Prime users pay roughly $6.58 a month for Prime at its current price. Even if Amazon raised it to the high-end of its estimate, that's still just less than $10 a month for use of Prime's services.

In comparison, Netflix (NFLX) users pay $7.99 a month or roughly $95.88 a year for its most popular package.

Costco Wholesale
(COST) users pay $4.58 a month or $55 a year for the warehouse's Gold Star Membership. Bumping that up to its Executive Membership, which features 2% rewards (up to $750 per year) increases the cost to approximately $9.16 a month.

Amazon hasn't released its overall number of members of Amazon Prime, only saying it has "tens of millions of members worldwide." The company did say that during the December period it had record numbers of new members signing up and that it had to limit "new Prime membership signups during peak periods."

--Written by Laurie Kulikowski in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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