Amazon Raises Prime Membership Prices

Amazon Prime

Amazon announced it is raising the price of its Prime membership from $99 to $119 its first price hike since March 2014. According to CNBC, the company revealed the price increase during its first quarter earnings call.

Amazon attributed the increase to the service’s rising costs, although it didn’t reveal how much the service costs to run. A few months ago, the eCommerce giant raised Prime’s monthly membership from $10.99 per month to $12.99 per month an 18 percent increase.

New users will pay $119 for Prime starting on May 11, while existing Prime members have until June 16 to renew their membership at the current $99 price-point.

The company has worked hard to make Prime worth the cost. In fact, analysts estimated that Amazon spent $4.5 billion on non-sports programming in 2017, and CEO Jeff Bezos joked that Amazon was the first company to use a Golden Globe to sell toilet paper after its show “Transparent” won the award in 2015.

Its efforts do seem to be paying off, with research showing that Prime members spend nearly double what non-members do per year on the site.

On the earnings call, Amazon’s Chief Financial Officer Brian Olsavsky said, “The value of Prime to customers has never been greater. And the cost is also high  as we pointed out especially with shipping options and digital benefits, we continue to see rises in costs. So, effective May 11, we’re going to increase the price of our U.S. annual plan from $99 to $119 for new members. The new price will apply to renewals starting on June 16. Prime provides a unique combination of benefits, and we continue to invest in making this Prime program even more valuable for our members. As a reminder, we haven’t increased the U.S. annual price Prime since our single increase, which was in March of 2014.”

In Amazon’s first quarter earnings, it reported that its “subscription services revenue,” which includes Prime memberships, grew 60 percent to $3.1 billion and its earnings-per-share more than doubled since last year.