On Thursday, Amazon.com unveiled that it will hike the Prime fee 20% from $99 to $119 starting next month. The change will affect only U.S. customers.
Amazon made the announcement one week after it unveiled that over 100 million people are paying for a Prime membership.
The latest decision was unveiled in a conference call about the company’s Q1 earnings. On Thursday afternoon, the e-commerce giant reported colossal profit and sale increases, which pushed its stock to record highs.
Amazon’s CFO Brian Olsavsky explained that the fee increases are prompted by the Prime program’s rising costs related to shipping and digital perks. “The value of Prime to customers has never been greater,” Olsavsky also said.
The executive made the comments following an analyst’s question about the program. He unveiled that the Prime fee will go up from $99 to $110 starting May 11. The increase will affect new members and only the U.S. market.
Some Older Subscribers Will Pay the Increased Fee
Also, current Prime subscribers who renew the service after June 16, 2018, will have to shell out the higher fee, which marks a 20% rise. Amazon has reportedly not changed the Prime membership fee since March 2014.
From March 2014 and April 2018, the company spent billions of dollars on content for the program and a global delivery infrastructure.
The National Football League (NFL) recently announced that it has renewed a contract with the retailer for Thursday Night Football’s streaming rights for a couple of years more.
Prime members have access to free video streaming and free two-day shipping if they live in the U.S.
Last week, the company’s founder Jeff Bezos told investors that the Prime program had more than 100 million subscribers. It is the first time Amazon makes the number of its Prime members public. A 20% rise in the current fee for 100 million members means an additional $2 billion for the company.
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