I'm sure the economists at Amazon have done the analysis. Now that the market is cornered and inelastic, revenues will increase with rising prices.
Most people would like the first benefit more than the second. If you're a farmer, maybe you want the manure, but to most people that "benefit" doesn't apply. Is my average customer sarcastic in claiming that all my service offers is two day shipping? No. That's just the only part of the service they would ever care about.
I would bet that most prime customers are interested specifically in the shipping, so to them the fringe benefits are irrelevant.
Again - I bet you that most people care about the shipping and nothing else. That is an important fact when considering the value prime offers.
Amazon is trying to leverage their dominant market position to enter video streaming, music streaming, ... etc.. And have customers pay higher rates on top of that. At some point that becomes abuse of monopoly.
Our household saves more on delivery fees then annual subscription price and you get access to their movies and TV shows, plus other prime stuff (early access to items, etc.)
I think some will be turned off but it won't really be a lot of folks at the end of the day.
Are you sure? Amazon has free shipping for orders over $25, if you didn't have that "free" shipping, how many times would you pay for shipping versus consolidating multiple orders? Would you count on free 2-day shipping or order far enough ahead to get the free shipping.
I'm a long-time prime member when when my renewal comes up, I'm not sure I'm going to renew. Since I'm already a Netflix subscriber and the Amazon "free prime" catalog is worse than Netflix, prime video is not much of a draw for me
Most items on amazon I can get next day for free. Sometimes it saved my bacon (forgetting a gift or some household item) and sometimes I just get what I want faster. That aspect is very appealing to me.
If they remove the next day shipping or start charging I will reconsider because it won’t make sense to wait for stuff that I can easily go to a store and buy.
So yeah, they have free shipping but not on next day delivery.