Amazon to raise annual Prime subscription to $119, a 20% increase

Alicia Cross
April 27, 2018

During its Q1 2018 earnings call, Amazon CFO Brian Olsavsky told reporters that Amazon is increasing the price of its annual subscription from $99 per year to $119 per year. The company will roll out the new fee on May 11 for new customers, and June 16for existing members.

Amazon said it earned $1.6 billion in the first three months of this year on revenue that soared to $51 billion from $36 billion in the same period last year. The online retailer recently disclosed for the first time that it had more than 100 million paid Prime members worldwide.

As of January of this year, Amazon had its search for the site of its HQ2, or its next headquarters, narrowed down to 20 cities, one of which is Washington, DC.

North American net sales increased 46% to $30.7 billion, with operating income of $1.25 billion. Those numbers are significantly better than what analysts expected, and up 43 percent from the same quarter previous year.

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Shares of Amazon jumped more than 7% in after hours trading Thursday following the earnings results. Analysts were expecting 85 cents per share on revenue of $25.8 billion. The change took effect immediately for new members, and for existing members the changes were implemented on February 19.

Its also said that Amazon Web Services, which hosts a cloud computing platform that is used by a number of major companies, also performed well in the quarter.

In 2017, AWS announced more than 1,400 significant services and features, including Amazon SageMaker, which radically changes the accessibility and ease of use for everyday developers to build sophisticated machine learning models, the letter added. The company plans to spend more on video content this year, including its renewed deal to stream Thursday Night Football games and a prequel television series to "The Lord of the Rings" in the works.

Since the last annual increase in 2014, both the value of Prime and the cost to offer it have increased significantly, Amazon said in a statement.

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