The thing is, 99% of the time, I don't care about getting things quickly, but I joined Prime last summer because I needed to buy a bunch of things for a trip to Europe, and I wanted to make sure stuff arrived in time. I initially planned to cancel it after a year, but I've tried the Prime Instant Video, and now I'm debating.
Either way, if it goes over the price of Netflix ($96 annually), I can't imagine choosing to stay with Prime over Netflix. The two-day shipping benefit is only significant if you would ordinarily have paid for two-day shipping. Otherwise, it's just not a very enticing perk unless you know you're going to need to buy a lot of gear in a short period of time. And that doesn't lead to continuous customer revenue. It leads to people buying it for just long enough to get the job done, then dropping it, which raises the cost for Amazon, which means they'll raise the price, and then even fewer people will buy it when it isn't absolutely necessary.
What really matters is the streaming service. And in that regard, Amazon's offering doesn't compare too favorably. Netflix has more content, and fewer encoding problems. There was one episode of Buffy where the video was jerky on every device I own, and I've watched a few TV shows where Amazon incorrectly encoded 16:9 content as letterboxed 4:3 content, so I get four black bars on my TV. That was excusable ten years ago. Now, it's just negligent.
And the Netflix iOS app actually works over cellular connections, unlike Prime, which deliberately refuses to work. That means if I were using Netflix, I could watch stuff on my phone while away from home as part of my unlimited data package. With Amazon, I have use my laptop, where I have a tethering data limit of about three hours of video.
So I've been debating whether to continue Prime even at $79 or jump to Netflix for only a few dollars more. Raise the price to $119, and they'll make my decision a lot easier.