It seems like most of the people I know who use Prime fall into two categories: 1) Those who use it for the free shipping 2) Those who use it for the non-ship

It seems like most of the people I know who use Prime fall into two categories: 1) Those who use it for the free shipping 2) Those who use it for the non-shipping services, like the video offerings and the Kindle lending library. There is probably a healthy percentage that use it for both, but I wouldn't be surprised if it's below the majority. I think the people in Category 2 are more likely to be willing to accept the higher fees than those in Category 1, for the reason you mention. Compared to, say, Netflix, this is still a decent deal.