Then Why didn't they raise the rates for annual subscriptions? Your right in 8 months they make more then the annual membership however those people are not locked in and you can't compare a customer who is locked in to your store and one that isn't.
Because most of their customers are annual subscribers and raising the rates even one penny is a drastic move and has to be done correctly. My guess is around Prime day they'll raise the rates while throwing in some one time benefit to make up for the increase.
If I had to guess I'd say the majority of month to month subscribers are either poor people or those that have trouble doing math. Poor people don't have $99 to drop but they can find $10 to scrape away every month. Dumb people, well, are just dumb and probably don't realize that it costs more. Regardless, no one is actually "locked in" more than a year. I have a feeling that many of the month to month people just testing out Prime move to annual once they're on for a few months.
