Amazon Raises Monthly Prime Membership Price by 18%
Amazon.com said today that it's raising its monthly Prime membership rates. The premium membership that grants faster shipping and access to Amazon Video will now cost $12.99 per month, up from $10.99, an 18 percent increase. Amazon is also increasing the discounted student monthly rate from $5.49 to $6.49 per month for new sign-ups.The cost of a yearly membership, $99, will not change. Recode first noticed the new price. The online behemoth started the monthly pricing model less than two years ago as a more flexible way to take advantage of Prime's fast shipping and other benefits.
Total Retail's Take: It makes sense that Amazon would raise the monthly price of Prime; the company wants subscribers to purchase Prime for the whole year. After all, Prime members spend considerably more with the retailer than non-Prime members. Furthermore, Amazon isn't overly concerned that raising the cost of a monthly Prime membership will lead to a mass exodus of customers. While Amazon doesn't disclose the number of Prime members in its earnings, it reported revenue from "subscription services" such as Prime grew 59 percent in the third quarter of 2017 vs. the prior year, to $2.4 billion. And while a study last year said Amazon Prime growth is plateauing in the U.S., research firm GBH Insights estimates 88 million people subscribe to Amazon Prime and expects only a 2 percent churn from the price hike as the more expensive monthly rate nudges users to an annual subscription.