Amazon (NASDAQ: AMZN) announced today that it will raise the price of its Prime subscription service from $79 to $99 per year. Amazon Student Prime will rise $10 to $49 a year. It's the first time that Amazon has hiked the price of the service since its inception nine years ago.
Current Amazon Prime members will pay the increased fee when they renew, starting on April 17. Any new customer who signs up starting March 20 will also pay $99.
The price increase doesn't come as a surprise. Amazon said in January that it may raise the Prime subscription as much as $40.
"The increased cost of fuel, transportation, as well as the increased usage among Prime members" have prompted Amazon to consider a price bump, Amazon CFO Tom Szkutak said during an earnings call in January. In fact, Amazon's net shipping costs have increased 19 percent to 1.21 billion, up 4.5 percent from a year earlier.
Amazon Prime launched to initially provide customers free two-day shipping on over 1 million items. It has since grown to include 19 million items, and the membership now includes access to Amazon Prime Instant Video and a digital library for Kindle owners for no extra charge. There have also been reports that Prime members will soon get access to a Spotify-like music streaming service.
Though Amazon has refused to divulge the exact number of people enrolled in Prime, in December the company said it was in the "tens of millions." A $20 price bump will give Amazon a nice bump in revenue.
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