Amazon.com, Inc. announced late Thursday that it would increase the price of its annual US Prime subscriptions.
It will raise membership fees by 17.00% to $139.00 per year, significantly higher than the previous $119.00.
At the same time, it will elevate the monthly rate from $12.99 to $14.99.
Correspondingly, new members will see the increased prices on February 18. Then, current members will receive the higher amount after March 25.
The last price hike was in 2018 when Prime adjusted to $119.00 from $99.00. Four years before that, Amazon stretched the subscription fee to $99.00 from the initial charge of $79.00.
Despite the price changes, the service had more than 200.00 million subscribers worldwide as of April 2021.
Moreover, the membership program remained one of the most extensive growth levers for Amazon’s core retail business.
The decision came as the e-commerce giant looks to offset the persisting higher costs for shipping and wages.
The firm recently raised salaries and offered generous signing bonuses to attract workers in a tight job market.
In addition, it rerouted packages over longer and costlier distances to avoid delivery disruptions.
Furthermore, Amazon also spends billions of dollars annually to include more compelling video and music content in its platform.
This expensive move aims to keep Prime members hooked on the streaming service.
Amazon Delivers 39.50% Growth on AWS
The tech giant also reported upbeat fourth-quarter results, with a 39.50% growth in its cloud division, Amazon Web Services.
AWS generated $17.78 billion in revenue during the holiday period, above the $17.37 billion consensus among analysts.
The segment closed the quarter 49.00% higher to $5.29 billion in operating income. It edged up from the expected $4.84 billion.
The total Q4 revenue of Amazon climbed 9.40% to $137.40 billion, surpassing the $137.60 billion market estimate. It is the firm’s first single-digit growth since 2017.
In line with this, its adjusted earnings elevated $5.80 per share, outpacing the anticipated $3.57.
Consequently, Amazon shares surged 14.24% or 395.34 points to $3,172.25 per share on Thursday’s extended trading.
