Drop the straight prizes and use a point system. One of the big issues is that you either win or lose. Most people doubt themselves and do not wish to put the effort in only to lose. If you had a point system, where every serious submission received points, it would help bring in entries. In addition, it would make it more fair. The winning piece is not always the best and this would help make the contest better. Of course we would need to work out how points are awarded, rewards, and stuff like that, but it would be an epic win. I have some ideas on prizes.
5,000 points - Custom user title (No HTML)
7,500 points - Custom user title (HTML)
15,000 points - Any ideas?
25,000 points - A ribbon next to your name for three months. (Like the book).
50,000 points - One free month of premium?
All serious entries earn 2,000 points. Anyone who makes it to the final five earns an additional 3,000 points. First place gets 5,000 additional points. Second places gets 2,500 additional points. Third places gets additional 1,250 points. Which means it would take someone five months, minimum, for one month of free premium. We would probably never have to give it out. Maybe once a year. Points would reset at the end of the year.