• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Jensen Huang says ‘a lot’ of six-figure jobs in plumbing and construction will soon be unlocked because someone needs to build new AI centers

2

Millennials say they’ll refuse to care for aging boomer parents—but they’ll be forced to as their inheritance shrinks to 40 cents on the dollar

3

The rise of 'conspicuous waiting': The 19th-century economic theory that explains why Gen Z posts their place in line

1

Jensen Huang says ‘a lot’ of six-figure jobs in plumbing and construction will soon be unlocked because someone needs to build new AI centers

2

Millennials say they’ll refuse to care for aging boomer parents—but they’ll be forced to as their inheritance shrinks to 40 cents on the dollar

3

The rise of 'conspicuous waiting': The 19th-century economic theory that explains why Gen Z posts their place in line

The truth about Amazon’s $8 monthly plan

By
Dan Mitchell
Dan Mitchell
Down Arrow Button Icon
By
Dan Mitchell
Dan Mitchell
Down Arrow Button Icon
November 7, 2012, 11:19 AM ET
Add Fortune on Google for similar content.

FORTUNE — Wired’s Marcus Wohlson argues that many people will pay for Amazon’s (AMZN) new $7.99-per-month Prime service for one of two reasons: either they can’t afford to shell out the $79 yearly fee for Prime all at once, or they believe that $7.99 just “feels” cheaper, even though it’s $17 more per year.

But there’s another reason people will sign up: because they don’t rent movies at a consistent pace throughout the year. Blockbuster discovered this in 2003 when it was developing its online movie-rental service in its early days. Later, executives reflected that if their test runs of the service had lasted longer, they might have picked up patterns of consumer behavior that would have helped them compete better against Netflix (NFLX), which ultimately helped crush them. (There were plenty of reasons Blockbuster didn’t make it.)

MORE: Is India getting Apple fever?

As related in Gina Keating’s book Netflixed, as a result of the too-short tests, Blockbuster counted everyone who quit the service as a lost customer, when actually, those people had been planning to come back to the service at a later date. This made the online-rental business, already viewed with skepticism by top management at the time, appear to be less successful than it really was.

Some customers, for example, might watch a lot of movies during the winter, and few or none during the summer months. For them, six months at $7.99 per is much cheaper than paying for a full year of Amazon Prime, which also offers Amazon customers free two-day shipping on their merchandise. (Prime is a gateway service to many of the company’s higher margin products.)

As Wohlson notes, the monthly plan is a direct assault on Netflix, since it’s priced the same as Netflix is but also offers free shipping on an endless array of merchandise. Some customers might sign up for a single month just to get free shipping for Christmas shopping — but in that case, Amazon probably counts it as a loss leader. Some of those customers will probably come back, perhaps for good. For the moment, Amazon is simply testing the idea.

About the Author
By Dan Mitchell
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • TikTok icon
  • YouTube icon

Latest in

The labor market could become so backward that the economy will have to shed jobs to keep unemployment steady
EconomyJobs
The labor market could become so backward that the economy will have to shed jobs to keep unemployment steady
By Jason MaAugust 1, 2026
3 hours ago
Amid fears of Iranian cyberattacks, Michigan joins Minnesota in reporting hackers targeted water systems. The FBI is now investigating
CybersecurityFBI
Amid fears of Iranian cyberattacks, Michigan joins Minnesota in reporting hackers targeted water systems. The FBI is now investigating
By Michael Casey and The Associated PressAugust 1, 2026
5 hours ago
Trump blasts Pirro after she admitted Reflecting Pool damage was caused by botched installation and blamed Interior Dept. for not sharing information
LawDonald Trump
Trump blasts Pirro after she admitted Reflecting Pool damage was caused by botched installation and blamed Interior Dept. for not sharing information
By Aamer Madhani, Matthew Daly and The Associated PressAugust 1, 2026
5 hours ago
Fed Chair Kevin Warsh talks a big game, but this market indicator will tell you if Wall Street trusts him after he caused a ‘credibility shock’
EconomyFederal Reserve
Fed Chair Kevin Warsh talks a big game, but this market indicator will tell you if Wall Street trusts him after he caused a ‘credibility shock’
By Jason MaAugust 1, 2026
6 hours ago
Spain puts up a 1,600-foot sea barrier between Ceuta and Morocco after EU states warn against ‘uncontrolled mass crossings’
PoliticsImmigration
Spain puts up a 1,600-foot sea barrier between Ceuta and Morocco after EU states warn against ‘uncontrolled mass crossings’
By Suman Naishadham and The Associated PressAugust 1, 2026
8 hours ago
Trump vows to restore his ‘Anti-Weaponization Fund’ a day after declaring it dead, while Tillis slams it as a ‘payout pot for punks’
PoliticsDepartment of Justice
Trump vows to restore his ‘Anti-Weaponization Fund’ a day after declaring it dead, while Tillis slams it as a ‘payout pot for punks’
By Eric Tucker and The Associated PressAugust 1, 2026
8 hours ago

Most Popular

Jensen Huang says ‘a lot’ of six-figure jobs in plumbing and construction will soon be unlocked because someone needs to build new AI centers
Success
Jensen Huang says ‘a lot’ of six-figure jobs in plumbing and construction will soon be unlocked because someone needs to build new AI centers
By Preston ForeAugust 1, 2026
13 hours ago
Millennials say they’ll refuse to care for aging boomer parents—but they’ll be forced to as their inheritance shrinks to 40 cents on the dollar
Personal Finance
Millennials say they’ll refuse to care for aging boomer parents—but they’ll be forced to as their inheritance shrinks to 40 cents on the dollar
By Nick LichtenbergJuly 31, 2026
2 days ago
The rise of 'conspicuous waiting': The 19th-century economic theory that explains why Gen Z posts their place in line
Retail
The rise of 'conspicuous waiting': The 19th-century economic theory that explains why Gen Z posts their place in line
By Tatiana SatauaJuly 31, 2026
2 days ago
Jensen Huang says this is the greatest time in history to start a business—and his advice is to stop overthinking it: 'How hard can it be?’
Success
Jensen Huang says this is the greatest time in history to start a business—and his advice is to stop overthinking it: 'How hard can it be?’
By Preston ForeJuly 31, 2026
1 day ago
'Retiring backwards': How cold economic reality forced Gen X into something like the reverse of baby boomers' golden years
Success
'Retiring backwards': How cold economic reality forced Gen X into something like the reverse of baby boomers' golden years
By Nick LichtenbergJuly 31, 2026
1 day ago
Polar bears roll in beds of ice cubes at Prague Zoo as Europe battles record heat
Environment
Polar bears roll in beds of ice cubes at Prague Zoo as Europe battles record heat
By The Associated PressJuly 30, 2026
2 days ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.