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.
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.
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.