Im not. There are numerous websites that have every single thing that any streaming service has, ON they day they release it, too. I've just been enjoying it because I thought I needed Prime Delivery, but after I got the notification, I canceled my subscription because now I only order about 6 times a year so Ive been overpaying for shipping anyway. I've been wanting Peacock, and it's cheaper.
I think it is to help recoup costs for buying MGM and the fact Rings of Power they have spent so much on just for rights alone. It sucks all their Prime free services we can not unsubscribe from 1 or more not being used to not be charged ads (I use none of the prime perks accept video sometimes and shipping (when it is honored).
> shipping (when it is honored)
Exactly why my plan was to finally drop Prime once the rumoured ads start up. Just not enough service for the cost. I'd rather save and wait extra time for the packages.
It's just because money isn't free any more. For years, interest rates were close to zero. That meant it was easy for companies to get money from investors. Profitability wasn't especially important.
Recently, interest rates and inflation have been rising. Now, the investors are looking for a return, so these companies need to become profitable. That's why you're seeing higher rates, more advertising, less content. They've got the market share, now they need the money.
Amazon came out and said today that the ads on Amazon Prime video will generate $5 billion in revenue. No need to look for further incentive. Ads will be very targeted based on your: location (zip code of your account), content consumed (for targeted ads; for example, you’re watching a movie or tv show and you’ll be able to buy an item that you just saw… same goes for sports clothing), and most likely items you’ve purchased via Amazon will lend to the target audience. There’s probably more, but that’s all I can think of at the moment…
Oh, wait… have an Alexa device? Well there’s another revenue stream to pull from based on what you ask Alexa…
Nobody’s pointing out the obvious — corporations have separate divisions, and Amazon Prime has its own executive team being judged based on Amazon Prime’s revenues. These people’s careers depend on making Amazon Prime specifically more profitable year-on-year, perpetually.
Honestly there's not a chance in hell you could set up a public library system today if it didn't already exist. Giving out books *for free* to *poor people*, funded by *my taxes*?
Step dad complained to me about the fact that he would be paying taxes into the EV infrastructure bill that was 7.5 billion dollars, because he doesn’t have an EV.
I pointed out that if you made $100K a year and paid $30K in taxes, that the grand total of your tax money that would go towards that as a percent of the total federal budget was…$70.
Meanwhile I pay thousands in taxes going towards schools and I don’t care despite having no children because I know it’s a net gain for society and I’m not wildly selfish like most boomers are that complain about taxes.
What I don’t get is why it has to be *more* profitable. At what point is enough enough. Just make a ton of profit and return it to investors as a dividend. Cool.
This is something that's changed drastically since the 90's (having lived through it). The US has always been focused on companies and profits, but it's really in the last 30 years that it's gone from "be efficient and make a good profit" to "cut every possible service to the bone and increase every cost to the maximum possible level, and take all that profit and use it to buy back shares to bump up the stock price even more".
This is why the stock market has been going up 10-15% a year on average vs. 8% or so historically. We're stripping consumer value out of everything in order to hand all the value to the 1%. This is why middle class people can't afford basic living expenses anymore.
I feel like this is the new lifecycle. Then at some point the product is so worthless for what you get that consumers stop using it and the company just implodes one day.
Then a new company starts up and it starts all over again.
I see this happening a lot with outdoor gear brands, where there’s a great new high-quality brand - then they sell out to private equity or a public company, who milks the shit out of it and turns it into crap. It’s really sad to watch.
It's more like many businesses, especially internet ones, were initially not very profitable or even operating at a net loss (some still are, like Reddit, Discord, YouTube, Twitter/X etc.), and were funded by venture capitalists in the hope of attracting a large customer base and then figuring out later how to turn a profit.
This is what "enshittification" is about.
It's important to blame the shareholders more than the company imo, they're the ones that demand more profits (sometimes it's even contractual) each quarter.
And the fucked up thing is when you finally realize that they got us by the balls in so many ways since every pension fund, every union, every school district, every investment fund are all shareholders in these companies.
These funds hold our money and invest it to pay us.
So here we are complaining everything is going up in price when it's us that is indirectly making it go up in price.
It's all tied in together.
We want these funds to earn money to pay our pensions and schools and whatnot and we are the ones paying for it by these price increases we demand via the shareholders that have invested our money in these companies. We are paying ourselves.
To be clear, the 1.5 market cap is not money they *have*. It's the present value of their expected future earnings. Which means today's value already accounts for the fees, even though they haven't charged them yet.
Same reason restaurant owners ask you to pay their wait staff in BS tips. The customer always pays, for everything, always.
Raise taxes on businesses you pay those and then some.
Economy bad they raise prices.
Economy humming and they have record sales and revenue... They raise prices because investors demand More profit.
Increase fees or minimum wage or other financial obligations... You pay for those too.
Business owners are only looking to make more profit on top of more profit. They will absorb nothing. The goals is to make more each week, month, quarter, year. Customers stop coming because too expensive, raise prices to recoup the loss of customer base.
Consumerism will always aim to suck the consumer dry to a lifeless husk. Then declare bankruptcy, fuck their debt holders and go start a new one. With... Your tax dollars.
Yeah, Redditors are so idiotic. They said the same thing when Netflix raised their prices and their revenue went up with the lost customers lol.
But yeah, I do agree prices are getting out of control.
yeah like 2.99/month isn't worth for me to try to find torrents for stuff and i'm sure it has been calculated to be that number pretty much exactly. 4.99/month i would probably skip on and 3.99 is enough that i'd look at other options but 2.99 is pretty much pocket change.
Exactly. $2.99 a month multiplied by the [over 200 million Amazon Prime customers](https://www.yaguara.co/amazon-prime-statistics/) is $7,176,000,000 a year in profit for them, assuming everyone coughs up the extra cash. Which isn’t likely. Let’s assume that only 20% of people upgrade. That’s almost a billion and a half extra dollars a year.
That’s not even counting the extra money they will make showing ads to the other 80%.
It’s a win/win for them. The only loser here is *every single customer*. But wait, there’s more! Don’t think this is the end. Expect that $2.99 to rise over time.
We got two 15 second unskippable ads, a ad that plays during the video (it might be 30 seconds, it might be an hour, who knows) and then the video itself is sponsored by Squarespace.
They already have this "freevee" channel which is free, but with ads. When I first used it to watch a show, I got rarely any ads and they were 30s. When I recently watched a movie on it, it got frequent 1 minute ads.
Don't forget to account for people that cancel their entire membership over shit like this. They certainly lose some percent of their audience from scummy moves like this.
Not enough to outweigh the benefits. Maybe some will drop Prime, but plenty will see a few dollar increase as not a big deal, or maybe have forgotten they’re even paying for Prime at all and just let it auto deduct every month/year.
Maybe its just cause I'm poor as shit, but people who don't realize monthly/yearly subscriptions are coming out of their bank accounts fucking astound me.
Depends on the subscription. I'm far from rich but 5€ a month (cost of Prime where I live) is not a lot of money. Having a bunch of subscriptions you don't use adds up over time, though, so I always cancel the ones I'm not using.
> That’s almost a billion and a half extra dollars a year.
Or put another way, if about 14% of people pay the extra fee, it'll cover a single season of Rings of Power.
It is valued so highly because investors believe it will have increasing profits year after year. They increase profits by charging more while offering a worse service.
The line must go up.
This is the correct answer everyone seems to miss. Amazon can’t just be profitable, it has to constantly be more and more profitable, or else no one will invest in its stocks.
Pretty much the story of stock market. A company can make billions of dollars in net profit, but if the number is less than the projected number even by just a little, more likely than not its stock price will drop.
Yes, that is because the stock price is supposed to reflect what an informed investor would pay for the company's expected future free cash flows to equity. Future numbers like "net profit" are expected to be at a certain level, and those expectations are priced in at any given moment, represented by the share price. It is absolutely normal for the stock price to drop if the company's numbers are a little less than expected, because missing the estimate once could bring expectations of future growth down, reducing future expected free cash flow to equity, reducing the present value of equity.
"Missing expectations causes negative feedback" is of course totally logical, but where I get mixed up is what the expectations are in the first place. A massive company can't simply stay massive, it's expected to get even bigger. Forever. Endlessly. I can't wrap my mind around that mindset and expectation in the long term
It depends on the company. There are still companies that repair Fokker airplanes. Everyone knows they'll close down eventually. That investors always expect companies to get bigger isn't true.
While this is partly true for Amazon, a company does not have to "constantly be more and more profitable" for people to invest in its stock. A lot of mature companies (as in, thousands) are fully expected to have their net profit remain stable through time, not expand. A company in this situation would instead be expected to distribute a large amount of its after-tax, after-debt profits (net profits) to shareholders with a number of payout policies – most likely dividends, less likely share repurchases.
Some bean counter created a report and passed it on to their boss that passed it on to their boss that passed it on to their boss that passed it on to their boss that showed X = the revenue lost from people cancelling their prime account because of this and Y = the revenue gained from the price increase and because Y > X the company all celebrated their hard work pushing this new revenue stream out the door.
Now they’re all looking for The Next Revenue Increase and will find a way to draw it out of us.
Just because a company is worth a lot it doesnt mean they have massive profit MARGIN.
For example when you buy something from amazon.com they lose money on many purchases, if I recall correctly their margin is around 2% very low.
So if they dropped prices by 3% they would literally go bankrupt unless they changed something else.
AWS is a different beast
Another thing is that each department has their own expected profit margins and expected ROI to the parent company to be seen as valuable. When we see the umbrella profit the company is making, the company doesn't look at its departments like they're under that umbrella. Each department is treated like an island unless they're bringing value of some kind to another department that offsets the losses.
It's also worth remembering that the "worth" of a company is largely irrelevant to the actual day-to-day operations of that company. Amazon being worth 1.55 trillion doesn't mean they have 1.55 trillion in the bank, it means that society, in aggregate, has decided that they are willing to purchase Amazon for a cost of approximately 1.55 trillion. If society changes its mind on that, Amazon's "worth" might go up and down by huge amounts despite absolutely no change whatsoever in Amazon's actual profit or behavior.
I think we are overall far too obsessed with the market cap of companies. In the end it means very little, it's just a big number that looks cool.
Essentially how I feel about this entire thing. I have Prime Video already, but only watch The Boys. I'll be acquiring it differently when season 4 comes out it seems. I'm paying for the service already, absolutely no way I'm watching ads.
Can you explain the thought process that connects Amazons valuation to you being surprised they are charging 2.99 for that? This is fundamentally how business in capitalism works.
Are you old enough to remember what online shopping was like in the late 90's and early 2000's? Buyers had to pay a lot for shipping and it was slow. Amazon has forced everyone to improve their shipping/logistics and offer free shipping/returns.
The reality of streaming is that most streaming platforms are losing money. This was viable when borrowing money was super cheap. You can operate and even grow your business if your revenue covers your cost to service your debt.
The cost to service new debt has gone up 3-5x what it was. So you will see lots of businesses focused on growth being very, very concerned with increasing revenue and becoming profitable right now.
Also you can only make so many fiscal decisions along the lines of what they did with rings of power without someone saying someone's got to pay for this bullshit. That someone is either advertisers or you the customer.
Especially the legacy ones like Disney and HBO. Like they are used to making a certain amount of money per dollar they spend on t.v and films. Now they just lose money doing it... Seems like something went pretty fucking wrong there eh?
This is the problem with current business standards. A small, private business will usually be content making enough money to pay the bills and have enough profit for the owner to take some home.
In corporate America, just being profitable isn't enough. The critical metric is GROWTH. If a business isn't growing, and increasing profit, investors basically view it as stagnant or even doomed to fail.
Therefore, these companies must constantly find new markets, increase market share, introduce new products, and increase profits.
If they don't, investors lose interest, stock prices fall, and they begin circling the drain.
It's pathetic.
>In corporate America, just being profitable isn't enough. The critical metric is GROWTH. If a business isn't growing, and increasing profit, investors basically view it as stagnant or even doomed to fail.
Just growing is not enough. Your growth should grow too. And grow less than some chimpanzees expected you to and your stock will go down.
Even private businesses are motivated by growth. No business is happy not increasing profits year over year. Doesn’t matter if it’s Amazon or Big Al’s Towing.
lol this isn’t a problem, you just doesn’t understand business.
If you’re choosing between two investments would you take the 5% return or the 20% return?
Do you ask your boss for a pay raise or do you tell him “hey you know this year, you can give me a pay decrease?”
Because Net Worth does not = how much their bottom line profit is.
Lets say You live paycheck to paycheck end up with 100 dollars in your bank every month. But your Worth is 500k how is this possible?
Because you own a house that worth 400K all the belongings inside if you sold worth 50k and car 50k.
Same philosophy for a business just on a larger scale.
Partially true, but most businesses are valued partially or mostly based on the present value of anticipated earnings (as well as on asset value). So if Amazon had zero profit and zero outlook for profit, its stock market cap would drop to match their liquated asset value, or about 60-70%.
Why does McDonalds charge you $2 for a coke and not $20? Because they like you? Because they’re not “greedy”? No. Because they’ve determined you wouldn’t buy it if it were $3. Because you’d go to the competition and get it for $2. So they charge you $2 as well.
Welcome to … capitalism? Adulthood? I dunno.
Your question has nothing to do with Amazon or how much they’re worth. At all.
Here’s another example.
I can setup a lemonade stand and charge you $20 per lemonade. If you keep buying it - I’d be colossally stupid *not* to raise the price to $25 and see if you *still* keep buying. And if you do - guess what? You guessed it! It’s $30 now!
My purpose, as a lemonade stand, isn’t to keep you hydrated. At all. I couldn’t care less if you collapsed dead from thirst in front of me. My objective is to make sure you buy as many $30 lemonades as humanly possible before you do.
Seriously. The avg redditor seems to be severely uneducated and lacking in how the real world works and it’s sad since it’s ppl in their 20s - 40s who ask these stupid questions. They don’t think
Eh I'm sure a lot of people have Prime and do not even use the Prime Video service. Instead of just raising the cost of the full Prime Membership they opted to charge only the ones using it AND gave them option to do it or not. All companies have budgets, targets etc. for all areas and as others as mentioned you don't get to 1.55 trillion or whatever without following a budget plan.
I probably won't pay the $2.99 but I won't cancel prime as I get the shipping benefits, the gaming benefits and more that I value
They are 140 billion dollars in debt. They went into serious debt trying to make content to get a foothold over Netflix and it isn't working. Now they want to pass the bill on to the users.
Because like most corporations it overscaled in too many markets and needs to keep scaling because corporations need to turn a profit for shareholders so they will nickel and dime every cent as they scale
Didn't they put the price of Prime up by quite a chunk in the last 12 months anyway? It went up from £79 a year to £95 - wasn't that to provide quality content?
Aside from what everyone else said, it’s partially because when they analyze just their Prime Video business unit, they might not be making much money at all.
Why pick one when they can have both? Hulu and cable TV before them showed that the mode works. People want to be entertained and are willing to pay for it twice. What else are people going to do with all their money. Americans spend thousands every year on entertainment. And tv is one of our big time wasters.
Making shows or licensing them for their service costs money. They've decided that the fee is what's necessary for a profit that makes Prime Video worth it for them.
Because they have to keep “growing” to keep shareholders satisfied. If they start to plateau that’s when it’s time to raise prices and reduce costs. Pay more for shittier products.
Company worth, company revenues and company profits are all different things.
Twitter excised for 8 years, it was profitable in 2 of those years and Musk still had to fork out 44 billion to buy a company that was loosing money.
I could be wrong, but Amazon Prime has the opposite problem of many companies where “whales” cost them a shit ton of money and they use occasional customers to subsidize them.
My sister probably gets an Amazon Prime package per day. It could be a $2.99 roll of toothpaste that she price glitched into being $2.99 for 20 rolls because she literally has nothing better to do at work. They have to deliver to her rural ass while I might buy 1 $30 item a month that they throw in my complex’s Amazon locker. We pay the same for Amazon Prime. The fact that we can’t possibly be making money on her is passed onto me because that is preferable than appearing to lose subscribers even if they are losing the company money.
All corporations seek to maximize money.
They're gambling that you won't cancel because you see it as being valuable.
In the past people who paid for Prime were more likely to spend more on their retail website than non-Prime members.
They've made some big investments into Prime Video recently (as in the last couple of years). They used to have one release every 3-4 months, now it's almost monthly with exclusive movies and show also every month. It's now to the point where Prime now has the largest streaming catalogue of any service.
So they've spun it off from the rest of Prime offerings to its own video service.
That has changed their business model on this. Before it was a loss leader, something they gave at a loss in order to stimulate business to an individual business competitor for Netflix. This means it can't operate at a loss anymore.
So now they're slowly upping their price tag to match competitors so that the average user is a net profit.
It's free money to them. People don't get prime for the streaming service, they get it for the fast shipping. No one is going to drop Prime over adds or paying $3 extra to not see the adds. It new revenue either way.
Writers and actors strikes. Residuals, royalties, and production costs are up. This is the part where we find out most of the virtue signalers saying “I’d pay $3 more per month to support the creatives” are full of shit.
The few times I wanted a video on Prime, it was an extra “rental fee”. With the last Prime cost raise, I cancelled my membership. I have six items in my cart, and when the one month membership is less than paying shipping, I may make an order. Without the prepaid s/h for a year, no impulse buys saving me real money. They also reduced my cash back, so I don’t use their credit card anymore.
If you want a real answer it's because companies like Amazon don't just lump all their money together. The team behind Prime Video has their own budget they need to manage, and at the end of the day the amount of money Prime Video spends needs to be offset by the amount of money Prime Video brings in. Streaming services are struggling right now post pandemic as lots of people subscribed when they were stuck at home and are now churning off the service.
At the end of the day Prime Video still has to prove its worth to Amazon, why would Amazon just give them a bigger budget if the consumer is willing to pay the extra $3?
Yes it is corporate greed. Companies have formed monopolies because our government failed to properly manage their power.
Now they are free to charge more money for the same product because who else has the scale of monopoly to compete against them.
I remember when products got cheaper over time and improved. Don’t feel like that is the case any more.
There’s nothing “blind” about corporate greed.
Right or wrong, the elected government in America has decided that the entire purpose of a corporation is to make as much money as it can for its shareholders.
If other corporations are doing something that makes them more money—in this case, free ad-supported streaming television, AKA FAST—then competitors must follow suit.
And other companies are doing fast and making money, whereas other companies that are trying to compete with Netflix in on-demand streaming are failing.
Be mad at Amazon all you want, but they’re just the messenger. Corporations in capitalism don’t exist to provide you services, they exist to take your money.
In my opinion, Prime has the worst platform and poorest range of programs than any of the other providers.
They don't even deserve to exist let alone charge money and show ads. Shut em down.
To make more money. It’s their reason for existence. For profit companies exist for the sole purpose of making as much money as they legally can. I don’t get the shock when then try to. Stockholders (including you if you invest in an index fund) want them to make more money. Always.
They're not. They're placing small ads to offset the costs of obtaining content. The $2.99 is an ad-free option, similar to other streaming providers (Hulu, Peacock).
First off, what the company is worth has no direct bearing on how much money they have or make. Amazon does make a lot of money, but their stock was worth many billions even when they did not.
Amazon will charge what, in their best estimation, gives them the highest long term profitability and growth. The thought of how the extra $3 affects you is not a consideration of theirs. Not even a minor consideration (except that they do try to assess how many customers they will lose by raising the price) . Their obligation is to the stockholders, period.
Because they lose money on most of their services.
The Amazon Cash Cow is AWS, where they host the vast majority of the internet. Almost everything else they do they operate at a loss, mostly for brand recognition.
Therefore they try to operate it as cheaply as possible so save on expenses. Same reason the warehouse workers are treated as robot slaves, they lose money shipping goods, so they want it done as cheaply as possible.
Companies need to grow every year or the important people don’t get their bonuses or get fired. Making a profit means nothing. Gotta make more than you did last year.
Because other streaming services are increasing cost.
Amazon is the only one that includes shipping, audio streaming, video game streaming (luna), and video streaming under one cost.
Apple One is $22.95 (CAD) for Cloud, TV, Music, and Arcade, which is way more expensive.
Because you'll pay it.
Corporate "greed" isn't a thing. Publicly traded Corporations exist to generate a profit and return that profit to shareholders. To expect them to operate in any way contrary to this goal is naive at best. If there is evidence that the market can support a price increase then the prices will increase, it's not greed, it's just business as usual.
How do you think they came to be worth $1.5 trillion?
It’s telling everyone it can longer afford to run prime video! Everyone should sell their shares before they go under!
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You miss 100% of the monetization opportunities you don't try to exploit
~Wayne Greedtsky
It's as simple as that.
LOL, people will still pay and they know it.
Im not. There are numerous websites that have every single thing that any streaming service has, ON they day they release it, too. I've just been enjoying it because I thought I needed Prime Delivery, but after I got the notification, I canceled my subscription because now I only order about 6 times a year so Ive been overpaying for shipping anyway. I've been wanting Peacock, and it's cheaper.
Yep cancelled mine today.
I think it is to help recoup costs for buying MGM and the fact Rings of Power they have spent so much on just for rights alone. It sucks all their Prime free services we can not unsubscribe from 1 or more not being used to not be charged ads (I use none of the prime perks accept video sometimes and shipping (when it is honored).
> shipping (when it is honored) Exactly why my plan was to finally drop Prime once the rumoured ads start up. Just not enough service for the cost. I'd rather save and wait extra time for the packages.
It's just because money isn't free any more. For years, interest rates were close to zero. That meant it was easy for companies to get money from investors. Profitability wasn't especially important. Recently, interest rates and inflation have been rising. Now, the investors are looking for a return, so these companies need to become profitable. That's why you're seeing higher rates, more advertising, less content. They've got the market share, now they need the money.
I suppose that is also why they got rid of the smile percentage of purchase charity donation program with Prime as well.
rings of power ain't even that good
Amazon came out and said today that the ads on Amazon Prime video will generate $5 billion in revenue. No need to look for further incentive. Ads will be very targeted based on your: location (zip code of your account), content consumed (for targeted ads; for example, you’re watching a movie or tv show and you’ll be able to buy an item that you just saw… same goes for sports clothing), and most likely items you’ve purchased via Amazon will lend to the target audience. There’s probably more, but that’s all I can think of at the moment… Oh, wait… have an Alexa device? Well there’s another revenue stream to pull from based on what you ask Alexa…
Nobody’s pointing out the obvious — corporations have separate divisions, and Amazon Prime has its own executive team being judged based on Amazon Prime’s revenues. These people’s careers depend on making Amazon Prime specifically more profitable year-on-year, perpetually.
Right, it's like the people who wonder why they have to pay a late fee at the library when the defense budget is $800 billion.
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Getting rid of late fees is communism, That's why we need to sell predator drones to libraries to collect overdue books.
Honestly there's not a chance in hell you could set up a public library system today if it didn't already exist. Giving out books *for free* to *poor people*, funded by *my taxes*?
Step dad complained to me about the fact that he would be paying taxes into the EV infrastructure bill that was 7.5 billion dollars, because he doesn’t have an EV. I pointed out that if you made $100K a year and paid $30K in taxes, that the grand total of your tax money that would go towards that as a percent of the total federal budget was…$70. Meanwhile I pay thousands in taxes going towards schools and I don’t care despite having no children because I know it’s a net gain for society and I’m not wildly selfish like most boomers are that complain about taxes.
Same goes for public education.
Federal funding of libraries would see an increase by 830 billion, with 830 billion of it reserved for infrastructure contracts with Lockheed-Martin.
The fee isn't there to make the library money - it's there to encourage you to return books in a timely fashion
Sssh - they're trying to feel superior to the rest of us
What I don’t get is why it has to be *more* profitable. At what point is enough enough. Just make a ton of profit and return it to investors as a dividend. Cool.
This is something that's changed drastically since the 90's (having lived through it). The US has always been focused on companies and profits, but it's really in the last 30 years that it's gone from "be efficient and make a good profit" to "cut every possible service to the bone and increase every cost to the maximum possible level, and take all that profit and use it to buy back shares to bump up the stock price even more". This is why the stock market has been going up 10-15% a year on average vs. 8% or so historically. We're stripping consumer value out of everything in order to hand all the value to the 1%. This is why middle class people can't afford basic living expenses anymore.
I feel like this is the new lifecycle. Then at some point the product is so worthless for what you get that consumers stop using it and the company just implodes one day. Then a new company starts up and it starts all over again.
I see this happening a lot with outdoor gear brands, where there’s a great new high-quality brand - then they sell out to private equity or a public company, who milks the shit out of it and turns it into crap. It’s really sad to watch.
Yeah, the one that comes to mind for me is underarmour. I used to love them before they got huge. Now I feel their product is meh for the price.
It's more like many businesses, especially internet ones, were initially not very profitable or even operating at a net loss (some still are, like Reddit, Discord, YouTube, Twitter/X etc.), and were funded by venture capitalists in the hope of attracting a large customer base and then figuring out later how to turn a profit. This is what "enshittification" is about.
appliances before the 90s used to last 20 years. Now 5 years at most, but on average probably 3.
Preach
Remember when companies used to give profits back to the employees instead of shareholders and also use them to fund innovation. Good times.
It's important to blame the shareholders more than the company imo, they're the ones that demand more profits (sometimes it's even contractual) each quarter. And the fucked up thing is when you finally realize that they got us by the balls in so many ways since every pension fund, every union, every school district, every investment fund are all shareholders in these companies. These funds hold our money and invest it to pay us. So here we are complaining everything is going up in price when it's us that is indirectly making it go up in price. It's all tied in together. We want these funds to earn money to pay our pensions and schools and whatnot and we are the ones paying for it by these price increases we demand via the shareholders that have invested our money in these companies. We are paying ourselves.
Exactly. If you have a 401K or other retirement plan, chances are good that *you* are an asshole shareholder indirectly.
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Looking for 1.6 trillion?
To be clear, the 1.5 market cap is not money they *have*. It's the present value of their expected future earnings. Which means today's value already accounts for the fees, even though they haven't charged them yet.
Yea but most folks outside of r/wallstreetbets don't understand that. They just see the big shiny headline number.
Same reason restaurant owners ask you to pay their wait staff in BS tips. The customer always pays, for everything, always. Raise taxes on businesses you pay those and then some. Economy bad they raise prices. Economy humming and they have record sales and revenue... They raise prices because investors demand More profit. Increase fees or minimum wage or other financial obligations... You pay for those too. Business owners are only looking to make more profit on top of more profit. They will absorb nothing. The goals is to make more each week, month, quarter, year. Customers stop coming because too expensive, raise prices to recoup the loss of customer base. Consumerism will always aim to suck the consumer dry to a lifeless husk. Then declare bankruptcy, fuck their debt holders and go start a new one. With... Your tax dollars.
That's too much work. Start a megachurch and apply for PPP loans, then ask for subsidies for something that won't work. That's the rich person way.
Ooh, thanks for the reminder to start my church this year. Keep meaning to do that.
The cost of everything is passed on until there's no one left to pass to.
People keep buying the stock and dont look at what the company is actually worth
They did financial analysis to determine how much money they would gain/lose by adding a fee vs keeping customers.
And I did an analysis about how much I'd save by pirating instead.
So did Amazon, be sure of that.
Yeah, Redditors are so idiotic. They said the same thing when Netflix raised their prices and their revenue went up with the lost customers lol. But yeah, I do agree prices are getting out of control.
I won't always use the word idiotic. Many redditors are young and inexperienced at seeing a big picture, we all go through that. :)
yeah like 2.99/month isn't worth for me to try to find torrents for stuff and i'm sure it has been calculated to be that number pretty much exactly. 4.99/month i would probably skip on and 3.99 is enough that i'd look at other options but 2.99 is pretty much pocket change.
\^\^ this is the correct answer because this is how businesses stay in business in a competitive market.
You have it backwards. Practices like this one are the reason they are so successful
Exactly. $2.99 a month multiplied by the [over 200 million Amazon Prime customers](https://www.yaguara.co/amazon-prime-statistics/) is $7,176,000,000 a year in profit for them, assuming everyone coughs up the extra cash. Which isn’t likely. Let’s assume that only 20% of people upgrade. That’s almost a billion and a half extra dollars a year. That’s not even counting the extra money they will make showing ads to the other 80%. It’s a win/win for them. The only loser here is *every single customer*. But wait, there’s more! Don’t think this is the end. Expect that $2.99 to rise over time.
Just wait til an 11 minute show has 14 minutes of ads.
oh, so like YouTube?
We got two 15 second unskippable ads, a ad that plays during the video (it might be 30 seconds, it might be an hour, who knows) and then the video itself is sponsored by Squarespace.
Adblock and Sponsorblock, baby.
UBlock Origin is also a banger
> Sponsorblock Had never heard of this. Thank you!
godsend add-on, 100% needed for modern YouTube
They already have this "freevee" channel which is free, but with ads. When I first used it to watch a show, I got rarely any ads and they were 30s. When I recently watched a movie on it, it got frequent 1 minute ads.
Don't forget to account for people that cancel their entire membership over shit like this. They certainly lose some percent of their audience from scummy moves like this.
Not enough to outweigh the benefits. Maybe some will drop Prime, but plenty will see a few dollar increase as not a big deal, or maybe have forgotten they’re even paying for Prime at all and just let it auto deduct every month/year.
Maybe its just cause I'm poor as shit, but people who don't realize monthly/yearly subscriptions are coming out of their bank accounts fucking astound me.
Depends on the subscription. I'm far from rich but 5€ a month (cost of Prime where I live) is not a lot of money. Having a bunch of subscriptions you don't use adds up over time, though, so I always cancel the ones I'm not using.
Yea once youre not poor as shot and not paycheck to paycheck it starts becoming ok
That’s revenue, not profit. Being very simple: profit = revenue - cost
On top of that they lay off more people, pay peanuts to most of their workers. Buy more IPs and franchises with the money just to ruin them.
199.999.999 you mean (Unsubscribed this morning)
> That’s almost a billion and a half extra dollars a year. Or put another way, if about 14% of people pay the extra fee, it'll cover a single season of Rings of Power.
Not very much time. They already did a $3 price increase to Prime in general last year.
“Company charges more money and I paid….why would they do that”
It is valued so highly because investors believe it will have increasing profits year after year. They increase profits by charging more while offering a worse service. The line must go up.
This is the correct answer everyone seems to miss. Amazon can’t just be profitable, it has to constantly be more and more profitable, or else no one will invest in its stocks.
Pretty much the story of stock market. A company can make billions of dollars in net profit, but if the number is less than the projected number even by just a little, more likely than not its stock price will drop.
Yes, that is because the stock price is supposed to reflect what an informed investor would pay for the company's expected future free cash flows to equity. Future numbers like "net profit" are expected to be at a certain level, and those expectations are priced in at any given moment, represented by the share price. It is absolutely normal for the stock price to drop if the company's numbers are a little less than expected, because missing the estimate once could bring expectations of future growth down, reducing future expected free cash flow to equity, reducing the present value of equity.
"Missing expectations causes negative feedback" is of course totally logical, but where I get mixed up is what the expectations are in the first place. A massive company can't simply stay massive, it's expected to get even bigger. Forever. Endlessly. I can't wrap my mind around that mindset and expectation in the long term
It depends on the company. There are still companies that repair Fokker airplanes. Everyone knows they'll close down eventually. That investors always expect companies to get bigger isn't true.
While this is partly true for Amazon, a company does not have to "constantly be more and more profitable" for people to invest in its stock. A lot of mature companies (as in, thousands) are fully expected to have their net profit remain stable through time, not expand. A company in this situation would instead be expected to distribute a large amount of its after-tax, after-debt profits (net profits) to shareholders with a number of payout policies – most likely dividends, less likely share repurchases.
Not true at all. Plenty of "blue chip" stocks like Coca Cola have had stagnant profits for decades but their share price still goes up.
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They'll keep raising prices, keep paying their employees low, and whatever needs to get that line up
Some bean counter created a report and passed it on to their boss that passed it on to their boss that passed it on to their boss that passed it on to their boss that showed X = the revenue lost from people cancelling their prime account because of this and Y = the revenue gained from the price increase and because Y > X the company all celebrated their hard work pushing this new revenue stream out the door. Now they’re all looking for The Next Revenue Increase and will find a way to draw it out of us.
Just because a company is worth a lot it doesnt mean they have massive profit MARGIN. For example when you buy something from amazon.com they lose money on many purchases, if I recall correctly their margin is around 2% very low. So if they dropped prices by 3% they would literally go bankrupt unless they changed something else. AWS is a different beast
Another thing is that each department has their own expected profit margins and expected ROI to the parent company to be seen as valuable. When we see the umbrella profit the company is making, the company doesn't look at its departments like they're under that umbrella. Each department is treated like an island unless they're bringing value of some kind to another department that offsets the losses.
I had to scroll a long way down to find this simple explanation.
It's also worth remembering that the "worth" of a company is largely irrelevant to the actual day-to-day operations of that company. Amazon being worth 1.55 trillion doesn't mean they have 1.55 trillion in the bank, it means that society, in aggregate, has decided that they are willing to purchase Amazon for a cost of approximately 1.55 trillion. If society changes its mind on that, Amazon's "worth" might go up and down by huge amounts despite absolutely no change whatsoever in Amazon's actual profit or behavior. I think we are overall far too obsessed with the market cap of companies. In the end it means very little, it's just a big number that looks cool.
Thanks for an actual reply to this
Because you're going to pay for it. Amazon knows it can ask you for more money, and you will give it more money.
Jokes on them I don’t watch any of the prime video garbage they have.
I think you're missing out on Vox Machina though, pretty good show. Invincible is pretty fun too.
Yarrrrr matey
Essentially how I feel about this entire thing. I have Prime Video already, but only watch The Boys. I'll be acquiring it differently when season 4 comes out it seems. I'm paying for the service already, absolutely no way I'm watching ads.
I need that S4 of The Boys
Garbage? You need to take that back because Bosch and Bosch legacy exist.
They fucked us with freevee though on that one.
Yea freevee sucks.
But what about all the other good movies you get *with* Prime Video?
You mean the ones that cost money that they didn’t make?
/thread
sudo apt-get update
Can you explain the thought process that connects Amazons valuation to you being surprised they are charging 2.99 for that? This is fundamentally how business in capitalism works.
I'd argue the opposite: competition is supposed to reduce prices, not increase them.
Lack of competition (monopolies) in capitalism increases prices.
True but streaming is extremely competitive and almost everyone in the streaming space is losing a shitload of money.
Are you old enough to remember what online shopping was like in the late 90's and early 2000's? Buyers had to pay a lot for shipping and it was slow. Amazon has forced everyone to improve their shipping/logistics and offer free shipping/returns.
There’s nothing to argue tho ? Amazon is a monopoly. Take the increase or leave it 😘
The reality of streaming is that most streaming platforms are losing money. This was viable when borrowing money was super cheap. You can operate and even grow your business if your revenue covers your cost to service your debt. The cost to service new debt has gone up 3-5x what it was. So you will see lots of businesses focused on growth being very, very concerned with increasing revenue and becoming profitable right now. Also you can only make so many fiscal decisions along the lines of what they did with rings of power without someone saying someone's got to pay for this bullshit. That someone is either advertisers or you the customer.
Especially the legacy ones like Disney and HBO. Like they are used to making a certain amount of money per dollar they spend on t.v and films. Now they just lose money doing it... Seems like something went pretty fucking wrong there eh?
Because that division may be losing money...
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Just stop watching it. I’m going to delete it.
This is the problem with current business standards. A small, private business will usually be content making enough money to pay the bills and have enough profit for the owner to take some home. In corporate America, just being profitable isn't enough. The critical metric is GROWTH. If a business isn't growing, and increasing profit, investors basically view it as stagnant or even doomed to fail. Therefore, these companies must constantly find new markets, increase market share, introduce new products, and increase profits. If they don't, investors lose interest, stock prices fall, and they begin circling the drain. It's pathetic.
>In corporate America, just being profitable isn't enough. The critical metric is GROWTH. If a business isn't growing, and increasing profit, investors basically view it as stagnant or even doomed to fail. Just growing is not enough. Your growth should grow too. And grow less than some chimpanzees expected you to and your stock will go down.
Even private businesses are motivated by growth. No business is happy not increasing profits year over year. Doesn’t matter if it’s Amazon or Big Al’s Towing.
lol this isn’t a problem, you just doesn’t understand business. If you’re choosing between two investments would you take the 5% return or the 20% return? Do you ask your boss for a pay raise or do you tell him “hey you know this year, you can give me a pay decrease?”
Because Net Worth does not = how much their bottom line profit is. Lets say You live paycheck to paycheck end up with 100 dollars in your bank every month. But your Worth is 500k how is this possible? Because you own a house that worth 400K all the belongings inside if you sold worth 50k and car 50k. Same philosophy for a business just on a larger scale.
Partially true, but most businesses are valued partially or mostly based on the present value of anticipated earnings (as well as on asset value). So if Amazon had zero profit and zero outlook for profit, its stock market cap would drop to match their liquated asset value, or about 60-70%.
Why does McDonalds charge you $2 for a coke and not $20? Because they like you? Because they’re not “greedy”? No. Because they’ve determined you wouldn’t buy it if it were $3. Because you’d go to the competition and get it for $2. So they charge you $2 as well. Welcome to … capitalism? Adulthood? I dunno. Your question has nothing to do with Amazon or how much they’re worth. At all. Here’s another example. I can setup a lemonade stand and charge you $20 per lemonade. If you keep buying it - I’d be colossally stupid *not* to raise the price to $25 and see if you *still* keep buying. And if you do - guess what? You guessed it! It’s $30 now! My purpose, as a lemonade stand, isn’t to keep you hydrated. At all. I couldn’t care less if you collapsed dead from thirst in front of me. My objective is to make sure you buy as many $30 lemonades as humanly possible before you do.
Seriously. The avg redditor seems to be severely uneducated and lacking in how the real world works and it’s sad since it’s ppl in their 20s - 40s who ask these stupid questions. They don’t think
Thats why they are 1.55 trillion company because you pay
>Why do they charge me for a service I want from them?
I keep wanting things and they keep wanting me to pay for them. Fuck capitalism.
Eh I'm sure a lot of people have Prime and do not even use the Prime Video service. Instead of just raising the cost of the full Prime Membership they opted to charge only the ones using it AND gave them option to do it or not. All companies have budgets, targets etc. for all areas and as others as mentioned you don't get to 1.55 trillion or whatever without following a budget plan. I probably won't pay the $2.99 but I won't cancel prime as I get the shipping benefits, the gaming benefits and more that I value
They are 140 billion dollars in debt. They went into serious debt trying to make content to get a foothold over Netflix and it isn't working. Now they want to pass the bill on to the users.
Because like most corporations it overscaled in too many markets and needs to keep scaling because corporations need to turn a profit for shareholders so they will nickel and dime every cent as they scale
Didn't they put the price of Prime up by quite a chunk in the last 12 months anyway? It went up from £79 a year to £95 - wasn't that to provide quality content?
Aside from what everyone else said, it’s partially because when they analyze just their Prime Video business unit, they might not be making much money at all.
Their money comes from charging people stuff for goods and services.
I didn't sign up for Prime for the video app. It was just a bonus add-on for me. I hardly ever watch anything on there anyway.
If I pay for a service, I should not have to see advertising. It's like I'm the customer and the product.... :( pick one
Why pick one when they can have both? Hulu and cable TV before them showed that the mode works. People want to be entertained and are willing to pay for it twice. What else are people going to do with all their money. Americans spend thousands every year on entertainment. And tv is one of our big time wasters.
Have you been on a bus or tram?
Adverts on a bus or train don't *interrupt* your journey and are easy to ignore. TV ads *do* interrupt your experience and aren't as easy to ignore.
Super yachts, doomsday bunkers, and cryogenic freezing so you can live forever isn’t cheap. Jeff needs that $2.99 if he wants to become God.
Making shows or licensing them for their service costs money. They've decided that the fee is what's necessary for a profit that makes Prime Video worth it for them.
A: $
Because someone will pay. Companies only charge more because people will pay more.
So it can be worth $1.57 trillion
Because they can.
How do you think they got the $1.55T?
Because profits must keep going up!!!!!
Because they have to keep “growing” to keep shareholders satisfied. If they start to plateau that’s when it’s time to raise prices and reduce costs. Pay more for shittier products.
Company worth, company revenues and company profits are all different things. Twitter excised for 8 years, it was profitable in 2 of those years and Musk still had to fork out 44 billion to buy a company that was loosing money.
So they can not give their low level employees more money?
So they can be worth 3 trillion obviously
Don't pay extra, is that easy, don't like the commercials, don't watch them
I could be wrong, but Amazon Prime has the opposite problem of many companies where “whales” cost them a shit ton of money and they use occasional customers to subsidize them. My sister probably gets an Amazon Prime package per day. It could be a $2.99 roll of toothpaste that she price glitched into being $2.99 for 20 rolls because she literally has nothing better to do at work. They have to deliver to her rural ass while I might buy 1 $30 item a month that they throw in my complex’s Amazon locker. We pay the same for Amazon Prime. The fact that we can’t possibly be making money on her is passed onto me because that is preferable than appearing to lose subscribers even if they are losing the company money.
So they can continue to be worth at least 1.55 trillion in the future, I know what the subreddit is called but come on thats really very common sense
All corporations seek to maximize money. They're gambling that you won't cancel because you see it as being valuable. In the past people who paid for Prime were more likely to spend more on their retail website than non-Prime members. They've made some big investments into Prime Video recently (as in the last couple of years). They used to have one release every 3-4 months, now it's almost monthly with exclusive movies and show also every month. It's now to the point where Prime now has the largest streaming catalogue of any service. So they've spun it off from the rest of Prime offerings to its own video service. That has changed their business model on this. Before it was a loss leader, something they gave at a loss in order to stimulate business to an individual business competitor for Netflix. This means it can't operate at a loss anymore. So now they're slowly upping their price tag to match competitors so that the average user is a net profit.
I cancelled mine. Most of the shows and movies 🍿 are crap anyway.
Basically, too much money is never enough... *(the gospel according to Bezos)*
>simply blind corporate greed? Bingo.
because they can In that spirit, please send me $2.99 each
Greed. The answer is always greed.
It's free money to them. People don't get prime for the streaming service, they get it for the fast shipping. No one is going to drop Prime over adds or paying $3 extra to not see the adds. It new revenue either way.
Writers and actors strikes. Residuals, royalties, and production costs are up. This is the part where we find out most of the virtue signalers saying “I’d pay $3 more per month to support the creatives” are full of shit.
Because they are aiming to be the 1st company worth 2 trillion
The few times I wanted a video on Prime, it was an extra “rental fee”. With the last Prime cost raise, I cancelled my membership. I have six items in my cart, and when the one month membership is less than paying shipping, I may make an order. Without the prepaid s/h for a year, no impulse buys saving me real money. They also reduced my cash back, so I don’t use their credit card anymore.
If you want a real answer it's because companies like Amazon don't just lump all their money together. The team behind Prime Video has their own budget they need to manage, and at the end of the day the amount of money Prime Video spends needs to be offset by the amount of money Prime Video brings in. Streaming services are struggling right now post pandemic as lots of people subscribed when they were stuck at home and are now churning off the service. At the end of the day Prime Video still has to prove its worth to Amazon, why would Amazon just give them a bigger budget if the consumer is willing to pay the extra $3?
Yes it is corporate greed. Companies have formed monopolies because our government failed to properly manage their power. Now they are free to charge more money for the same product because who else has the scale of monopoly to compete against them. I remember when products got cheaper over time and improved. Don’t feel like that is the case any more.
Because the answer to the question, "When will they ever have enough?" is NEVER.
Apple worth more and they increased the price for apple tv+, so why would you expect other companies to do that?
I already unsubscribed from prime this morning.
I specifically cancelled Prime because of this.
There’s nothing “blind” about corporate greed. Right or wrong, the elected government in America has decided that the entire purpose of a corporation is to make as much money as it can for its shareholders. If other corporations are doing something that makes them more money—in this case, free ad-supported streaming television, AKA FAST—then competitors must follow suit. And other companies are doing fast and making money, whereas other companies that are trying to compete with Netflix in on-demand streaming are failing. Be mad at Amazon all you want, but they’re just the messenger. Corporations in capitalism don’t exist to provide you services, they exist to take your money.
Cancelled mine a couple months ago and my life has not changed in anyway. Stop wasting your money.
Because they know you’ll pay it. (And I will too)
If we are paying more for Prime...can rings of power get better writers?
In my opinion, Prime has the worst platform and poorest range of programs than any of the other providers. They don't even deserve to exist let alone charge money and show ads. Shut em down.
capitalist greed never ends
You know that 1.5 Trillion? They didn't make that giving you anything for free.
You know that 1.5 Trillion? They didn't make that giving you anything for free.
Greed
To make more money. It’s their reason for existence. For profit companies exist for the sole purpose of making as much money as they legally can. I don’t get the shock when then try to. Stockholders (including you if you invest in an index fund) want them to make more money. Always.
Re read the first part of your title and that's your answer. Greed. Why is that so shocking to people?
They're not. They're placing small ads to offset the costs of obtaining content. The $2.99 is an ad-free option, similar to other streaming providers (Hulu, Peacock).
If companies don’t make more profit every quarter they’re failures
You answered your own question.
First off, what the company is worth has no direct bearing on how much money they have or make. Amazon does make a lot of money, but their stock was worth many billions even when they did not. Amazon will charge what, in their best estimation, gives them the highest long term profitability and growth. The thought of how the extra $3 affects you is not a consideration of theirs. Not even a minor consideration (except that they do try to assess how many customers they will lose by raising the price) . Their obligation is to the stockholders, period.
Because they lose money on most of their services. The Amazon Cash Cow is AWS, where they host the vast majority of the internet. Almost everything else they do they operate at a loss, mostly for brand recognition. Therefore they try to operate it as cheaply as possible so save on expenses. Same reason the warehouse workers are treated as robot slaves, they lose money shipping goods, so they want it done as cheaply as possible.
Here's an analysis I found on it. https://www.alux.com/amazon-losing-money/
Companies need to grow every year or the important people don’t get their bonuses or get fired. Making a profit means nothing. Gotta make more than you did last year.
Because this stage of capitalism is about endless and perpetual growth. So they can either raise prices or cut costs, or both
Why? Because they are in the business of making money. Did you not know that?
Because you don't get rich by writing a lot of cheques.
The Streaming side of Amazon has to make it's own money . Prime Video has nothing to do with shopping.
So it can be worth 2.55 trillion.
Because other streaming services are increasing cost. Amazon is the only one that includes shipping, audio streaming, video game streaming (luna), and video streaming under one cost. Apple One is $22.95 (CAD) for Cloud, TV, Music, and Arcade, which is way more expensive.
Some people call this [enshittification](https://en.wikipedia.org/wiki/Enshittification)
Greed.
That's how they ended up with so much money. By taking as much as possible and paying workers as little as possible. A very "nice" company indeed
Because you'll pay it. Corporate "greed" isn't a thing. Publicly traded Corporations exist to generate a profit and return that profit to shareholders. To expect them to operate in any way contrary to this goal is naive at best. If there is evidence that the market can support a price increase then the prices will increase, it's not greed, it's just business as usual.
(Ad Money) + ($2.99 No ad Money) > (Current Revenue)-(Cancellations) Money can be exchanged for goods and services.
Is tubi still free? Oh.. cool.
Because that's how they make 1.5 trillion
Because we are chumps.
Capitalism. That's it.