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Amazon Boosts Rates on Prime in Europe

Paul Ausick

Online retailer Amazon.com Inc. (AMZN) has merged its Amazon Prime and Lovefilm instant video services in the U.K and Germany and prices will go up beginning next week. Amazon’s CFO said on the company’s most recent conference call that the firm could raise its U.S. Prime service by $20 or $40 a month.

According to a report at The Guardian, Amazon will merge its U.K. Lovefilm business into Amazon Prime in the U.K. and raise the price to $131 a year, up from $81. The instant video service can still be purchased separately in the U.K. at its current cost of $10 a month.

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The cost of a Prime membership in Germany will rise from $40 a year to $67. Users can lock in a first-year price of $67 or $40 in the U.K. and Germany, respectively, by signing up for a trial by February 26th.

Current subscribers won’t be hit with a price increase until their subscriptions come up for renewal, and, at least for the time being, Amazon will pass Netflix Inc. (NFLX) as the largest digital TV and film streaming business in the U.K.

Is this a test run to see how a price increase might be received in the U.S., where Prime costs $79 a year for free shipping and a subscription to Amazon’s streaming video library. Amazon’s statement that it was looking at raising U.S. prices did not have near the impact on customers as Netflix’s ill-fated attempt a couple of years ago to ditch its DVD mail subscriptions in favor of only the digital streaming format. There have been complaints and threats to cancel Prime if Amazon raises the U.S. price, and what happens in Europe will likely have an impact on whether the U.S. price remains the same or goes up; and if it goes up, by how much.

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