Amazon Raising Annual Price on Prime

Yearly rate to increase from $99 to $119 per year
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Amazon is set to raise the annual price on new Prime subscriptions in May from $99 to $119 per year, company CFO Brian Olsavsky said on the company’s Q1 2018 earnings call, according to multiple reports.

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The increase will take effect for existing Prime members, based on their renewal period, starting June 16, Variety noted.

Word of the coming 20% price hike comes about a week after Amazon CEO Jeff Bezos revealed in a letter to investors that Prime now exceeds 100 million members worldwide. It was the first time that Amazon had disclosed that number for Prime, which includes a mix of perks, including two-day shipping on items purchased via Amazon and access to a large streaming library of licensed fare and original series.

RELATED: Amazon Prime Exceeds 100 Million Subs

The annual price increase also follows today's announcement that the NFL and Amazon had renewed a deal to stream Thursday Night Football to Prime members worldwide for two more seasons.

Amazon increased the yearly price on Prime by $20 – from $79 to $99 – about four years ago as the company tried to get a grip on escalating shipping costs.

Amazon’s latest annual price increase also follows Amazon’s decision to raise Prime’s monthly price in the U.S. by $2 – from $10.99 per month to $12.99 per month.

Amazon has not announced plans to hike the price on an $8.99 per month standalone subscription video service that was introduced about two years ago.

The company announced Q1 sales of $51 billion, up 43%, and net income of $1.6 billion ($3.27 per diluted share), up from $724 million or $1.48 per diluted share in the year-ago quarter. In a statement, Bezos attributed the surge in part to a “remarkable acceleration” of growth at Amazon Web Services. Q1 sales at AWS hit $5.44 billion, up 49% year-over-year.  

Wall Street was expecting earnings of $1.27 per share on revenues of $49.96 billion.

Amazon expects Q2 net sales of $51 billion to $54 billion, up between 34% to 42%. 

Amazon shares were up $109.04 (7.18%) to $1,627 each in after-hours trading Thursday. 

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