Amazon's Q1 2018 earnings were just released, and the company once again beat estimates. But during the analyst call, it wasn't all good news — at least for customers. Amazon says that it will be increasing the yearly subscription price of Amazon Prime in the U.S. to $119 from the current $99.
This new price will go into effect for new Prime sign-ups starting on May 11, just a couple weeks away, while those of us who already have Prime won't be hit by the price increase unless our renewals come due on or after June 16. Amazon will send out emails to current subscribers with details prior to the change.
The month-to-month subscription option, which is $12.99/month ($156/year) after receiving a price bump earlier this year, will remain.
Amazon just boosted its (already massive) Prime revenue with a single move.
Amazon recently revealed that it has over 100 million paid Prime members worldwide — not all of whom pay the equivalent of $99/year, mind you — which is a hefty amount of recurring revenue that Amazon can rely on. Prime has increased in price a couple times since its launch (though the last annual increase was in 2014), and Amazon has regularly tinkered with other subscription options for its music service and Amazon Fresh grocery delivery. It has, of course, increased the value of Prime with new additions to the service as well — and Prime subscription growth doesn't seem to be slowing down.
Most people with Prime are deeply invested in it at this point and will simply say "sure, what's another $20?" — but from Amazon's perspective, that's a 20% boost in U.S. subscription revenue without having to grow its customer base. Sure the company is likely to lose a few Prime subscribers who are disgruntled with the increase, but that small loss will be more than covered by the aforementioned 20% increase from each remaining customer. A smart move, no doubt, even if it isn't particularly customer-friendly.
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