Streaming Psychology: Lessons from Amazon Prime Video’s sudden rental surprise

Navigating Cognitive Biases from a Subscriber’s Tale

6 min readJul 18, 2023

Picture this: a lazy Sunday afternoon, my hubby and I are all set for some good old bonding over our favorite shows on Amazon Prime Video. After a binge-worthy Breaking Bad marathon, we were hunting for our next watch, and what better than reliving the enchanting Harry Potter series? We savored half of it, keeping the rest for the following day.

But oh, that day! Our excitement turned to dismay as we discovered that Harry Potter was now on RENTAL! It was like a little piece of our cozy movie nights had been snatched away.

“Rentals include 30 days to start watching this video and 48 hours to finish once started“

A Sudden Blow:

You know, it hurt. Especially since we shelled out Rs 1499 for the Prime Membership, expecting endless streaming at our fingertips. Remember, just last year, Amazon slyly bumped up the prices from Rs 999? Yep, a pretty hefty hike that left our wallets feeling a bit light. Annual was still okay as for Rs 1499 they gave HD quality but monthly ones got a nice price hike.

There have been definitely some talks around it as published in many articles. Indian Express published here “Amazon Prime subscription gets a silent price hike: Now costs Rs 299 per month“

I was concerned so I guessed many were. Here are a few complaints people already made:

So what went wrong?

They Didn’t Let Us in on the Secret:

What really bugged me was the way they did it. No heads up, no fair warning. One day it’s all included, and the next day, poof! Some of the best movies were up for rent, and we felt left in the dark. Transparent, they were not.

Neglecting the Right Messaging:

You see, Amazon Prime has this whole bundle of goodies in their membership — free deliveries, prime music, reading, gaming, and more. But for folks like us, streaming is the real deal! And they didn’t really give us a straight-up reason for the price hike, no sweet talk or explanation. That left us feeling a bit miffed, like a kid who lost their favorite toy without any explanation

By not highlighting the value-additions or providing a comprehensive explanation for the increase in fees, Amazon missed a vital opportunity to justify the price hike and retain customer trust.

Missed the Human Touch:

Amazon, oh Amazon, you forgot something vital — the human touch! Like understanding that we signed up for all those movies and shows, not just for free shipping (though that’s cool too). They could’ve shared the news with us, talked to us like pals, and made it feel less like a corporate chess move.

A strong behavioral design approach involves understanding user psychology and preferences, crafting user-centric solutions, and effectively communicating changes. In this regard, Amazon Prime Video’s decision to withhold information and abruptly alter content availability did not align with good behavioral design practices.

One of the Twitter threads that expresses subscriber concerns. Check out here ➡️

Now coming to the main topic of how leaning into a bit of psychology principles might have prevented the blows Amazon is facing currently. Continue reading below ⬇️

Top 5 Cognitive Biases into play:

While all of this happened, Amazon does have the right to hike prices, it’s business after all but they did not manage behavioral frictions that they can come across while dealing with subscribers.

Cognitive biases can subtly influence our perceptions and decisions, and understanding them can help companies improve their behavioral design and communication strategies.

These biases are hypothetical in this scenario, based on my thought process but having knowledge of these earlier can help companies bring early solutions to fight the consequences, especially when it concerns finances.

Confirmation Bias

Subscribers who signed up for Amazon Prime Video with the expectation of unlimited streaming might be more likely to focus on the availability of popular movies on rent and perceive it as a disappointment, reinforcing their initial belief.

This is still the current information that Amazon provides on its Prime Membership page related to the feature: Prime Video

Prime Video can provide a dedicated section or showcase on its platform that highlights the full range of benefits and services offered within the Prime Membership to remind users of its comprehensive value so the subscriber’s focus is just not on the Prime Video benefit but also on others (Considering the other benefits are equally valuable).

Here’s an article that reflects why the services are not valuable enough compared to the subscription price change.

Anchoring Bias

The initial Prime Membership cost of Rs 999 might serve as an anchor for subscribers, making the subsequent hike to Rs 1499 feel much more significant and harder to accept. Initially, before the video streamings went on rent, this might have been justifiable, but after this move, the hike made no sense.

When implementing price changes, maybe a further risk was unknown. But once the decision of putting the videos on rent came, they could have adjusted the price or announced better clarifications for keeping the subscription price the same.

Endowment Effect

Subscribers who have been enjoying the unlimited streaming service might develop a sense of ownership over the content, leading them to feel a loss when some movies become available for rent.

To counter the endowment effect, Prime Video can emphasize the dynamic nature of content licensing and communicate that movie availability may change over time due to licensing agreements.

Even when the changes were reflected, Prime Video did not care to explain why the videos went on rent.

Loss Aversion

Subscribers might be more sensitive to perceived losses (e.g., missing out on movies previously available) than to potential gains from the price increase, especially if the benefits of the price hike are not clearly communicated.

To address loss aversion, Prime Video can communicate the positive impact of price increases, emphasizing the continued investment in exclusive content, improved streaming quality, and other benefits that justify the adjustment.

Recency Bias:

Present users with historical data or trends to provide context for changes, ensuring subscribers have a more balanced perspective and don’t over-emphasize recent events.

When introducing changes or new features, Prime Video can provide reports to contextualize the decisions and ensure subscribers have a broader understanding of the service’s evolution.

For instance, they could have shared information on how the availability of certain movies or series has changed over time due to the expiration of licensing contracts. By presenting data on previous instances when popular content temporarily became unavailable and later returned, users would gain a broader understanding of the dynamic nature of content licensing.