Amazon Prime currently has 100 million members, with its 77 million US members paying $99/year. The online retailer will raise its price to $119/year for new US members beginning May 11; those renewing a membership will pay the new price starting June 16. Only 80% need to stay on at the new price for Amazon to increase its annual revenue by over $1 billion.
Amazon's profits reached an all-time high last quarter at $1.6 billion. Overall sales also rose 43% from last year's first quarter (from $35.7 to $51 billion).
Some people have suggested that Amazon's purchase and development of a 5-season Lord of the Rings television show (which has a $1 billion budget and potential for a spin-off series) is contributing to the hike, but Amazon CFO Brian Olsavsky attributes the change to greater overall value compared to 2014, the last time that the price increased (from $79/year): “There [are] all kinds of new features that we’ve continually added to the Prime program. It’s much different than it was in 2014, and this is a reflection of that.”
The month-to-month price of $12.99/mo will stay the same, for now.
Do you blame Sauron for this price hike, ONTD?
A reminder that Jeff Bezos, founder and CEO of Amazon.com and owner of The Washington Post, has a personal net worth of approximately $130 billion.