Amazon mulls Prime price increase, could rise as high as $119

For those who regularly buy from Amazon, the company's Prime service is very handy indeed. For $79 a year, Prime customers enjoy free two-day shipping on over 19 million items, along with various other cool perks, such as unlimited streaming of movies and TV shows via Amazon's Instant Video service. 

But, as The Verge reports, Amazon Prime customers could soon face a price increase of up to 50%. Speaking on an earnings call with analysts, after reporting its latest quarterly financial results, the company's CFO, Tom Szkutak, confirmed that Amazon is "considering" raising the price of an annual Prime subscription in the US by between $20 and $40. 

Any price hike remains far from certain at this stage, so there's no need to scream with rage just yet. If Amazon does eventually increase prices, it could soften the blow of higher charges by adding further features to its Prime offering. Alternatively, it could choose to introduce a lower and cheaper subscription tier that perhaps focuses solely on delivery, but Szkutak reportedly avoided discussing any changes to the company's existing subs during the earnings call. 

There is one other possibility too - Amazon may simply be floating the idea of such large price increases in order to prepare users for a much more modest price hike. An increase of $5 or $10 might well be easier for customers to accept compared with talk of prices rising by $40. 

Source: The Verge | images via Amazon

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41 Comments

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first increase the price needed for free shipping and now this... hopefully there its a alternative for those outside of the us, so we can ditch amazon once for all.... sigh

I plan to cancel. The renewal is coming up in Feb. I want to see if they are planning to improve the service first. The free 2 day shipping usually takes more than 2 days. I can get free super saver shipping and not pay $80.

Drug dealers do this.....offer the drugs at a cheap price, get you hooked, then jack up the
price. Congrats to Amazon for potentially doing this to. Typical...

They do need to improve the Amazon Instant Video selection, but it has improved. I really want to see a good Amazon Instant Video app for Android as well as Windows 8.x and Windows Phone 8.x. I would also like to see them release a good Amazon Cloud Player app for Windows 8.x and Windows Phone 8.x.

I'd probably pay the $119 if their video streaming selection was closer to what Netflix has and they also had music streaming similar to what Spotify has (with mobile apps, etc.). That's kinda the holy grail to me, one service that has music and video (that's good)...

We've been using Prime for 6-7 years and share it with family. Due to our use as well as at least one family member regularly using the free 2-day shipping, it is worth the $79. In our case, I could see them raising the price, but I wouldn't be nearly as quick to pay it if it jumped all the way to $119.

If they feel they really need to raise the price, which I understand needing to possibly do, then I think they should start with $89-99, somewhere in there. That would be a 12.5% - 25% increase and they could always adjust the price again in 2 or 3 years if they really feel that it is necessary.

Furthermore, if raising the price, why not set a date for a price change and those that become Prime members before then are either grand-fathered in at the current price or at least a reduced price. So, for example, if they were going to raise the price to $89 per year, then let current Prime members or new sign-ups before the price change be grand-fathered in at $79 or maybe $84.

warwagon said,
Why? I'd still pay the $119.
Me too, I easily get that kind of value out of it. I think the "add a 'family member'" to this account will be a bit more abused though. Or at least more utilized.

I understand there are other people willing to fork more money and I respect that. They (you) can definitely keep enjoying it.

On the other hand there are people not willing, like me.

I get my value out of it. Always ordering something online that is cheaper than a real store. Plus the streaming I got to watch all of the Dr Who, Alphas, Betas, and a bunch of other shows. And my kids get to do the language stuff and my 4 year old is speaking pretty good spanish.

Nimdock said,
I understand there are other people willing to fork more money and I respect that. They (you) can definitely keep enjoying it.

On the other hand there are people not willing, like me.

The same can be said about every service/product ever offered.

And therefore why I said it might be time for MY addiction to Amazon to stop, no one else's. I was also not the one replying to other people's posts that were stating that for them they price hike would be OK.

Perhaps a tiered approach is better. X numbers of delivers = $79 a year, anything over X number bumps you to the new higher price. I am sure Amazon is ok with the "average" buyer, but when you start talking shipping costs it could well exceed $80 for people who order from them all the time. As of now with the amount of stuff I order, $80 is a steal

People need to remember that you can share your Prime membership with other family members too (from a delivery perspective, not streaming). They allow up to four accounts to share Prime, so it's pretty easy to split the subscription with parents, grandparents, etc, with everyone paying only $20/year.

Too expensive even at $80 a month for what you get. There are free shipping offers all over the place if you shop around vs just Amazon anyway.

Your assertion is true if you only use Amazon every once in a while. However if you use it all the time like my family does, then it becomes quite a bargain. I guarantee you Amazon has a lot of regular customers that take full advantage of Prime.

sava700 said,
Too expensive even at $80 a month for what you get. There are free shipping offers all over the place if you shop around vs just Amazon anyway.
It's per year. And if you order enough through amazing the one stop quick shopping experience you get with Amazon makes it very useful if you do use it. Those who buy a couple things a year there it's a waste of money. I had a heavy new office chair overnighted to me for $3.99. On that one order I was coming up on top.

This really makes me mad. I enjoy giving Amazon $79/yr to get the benefits of Prime. Why would Amazon screw the loyal customer base by increasing the price at all?

As of March 2013, it's reported that Prime contains 10mil users OUT OF 182 MILLION. That's like 6%! Why would Amazon want to screw over their loyal customers who spend more than double per year, on average, than non-Prime users!?

http://www.businessinsider.com...-members-morningstar-2013-3

Jason S. said,
This really makes me mad. I enjoy giving Amazon $79/yr to get the benefits of Prime. Why would Amazon screw the loyal customer base by increasing the price at all?

As of March 2013, it's reported that Prime contains 10mil users OUT OF 182 MILLION. That's like 6%! Why would Amazon want to screw over their loyal customers who spend more than double per year, on average, than non-Prime users!?

http://www.businessinsider.com...-members-morningstar-2013-3

To make it worth their while to offer the service. Next questions?

I will have to agree w/ Jason on this point. Not from a standpoint of if the service does truly make money now vs what it makes after raising the price. But from the standpoint of user base.

If the user base is really only 6% with the price being $80/year, then you can be pretty sure raising the price definitely won't increase the user base. It'll probably cause it to drop (by a lot if they raise it to $120) This in turn, will make it more expensive for them to run for a lot less people. Repeat the cycle of raising the price and losing more customers until it no longer exists.

If they do raise the price, I hope they introduce different levels of the service. Currently, I think I get my money's worth with the free shipping. I don't really take advantage of free streaming though.

I'm with Chugworth... It seems to me that the likely reason for an increase would be to be able to pay for more streaming content, as they couldn't reasonably cite rising energy prices (which has been the past excuse by many companies for rising rates). Our family/collective is just in it for the super-fast shipping =) Daily candy bar? Not so much...

Chugworth said,
If they do raise the price, I hope they introduce different levels of the service. Currently, I think I get my money's worth with the free shipping. I don't really take advantage of free streaming though.
They need to make the free "other stuff" a bit more user friendly to find/access etc. However, that's probably part of their service model.

I've been a Prime member for almost a year and the service really hasn't changed that much since I joined. Amazon needs to increase their streaming video selection. Once I got through most of the videos I wanted to see I realized how lacking their selection is and new content trickles out. Even if you don't like Netflix's streaming options, at least I can count on Netflix releasing content on a more regular basis. It'll be hard for me to justify paying more for Amazon Prime unless something changes.

have you used Prime Streaming recently? There's a ton of stuff now.

Also, Netflix is much older that Amazon's service. It takes years to make contracts to get all the content...

Also, i think people should boycott Amazon if they raise the price that much, or at all. Are there boycotting websites where people can petition and pledge to stop shopping there?

Jason S. said,
have you used Prime Streaming recently? There's a ton of stuff now.

Also, Netflix is much older that Amazon's service. It takes years to make contracts to get all the content...

Also, i think people should boycott Amazon if they raise the price that much, or at all. Are there boycotting websites where people can petition and pledge to stop shopping there?

I usually do a weekly check. Perhaps that's the problem, I check too much. Maybe I should wait like 4 months. Then I'd be blown away by all the new stuff!

Enron said,
I just have a candy bar delivered to my house daily on Amazon Prime free shipping. Makes it worth the $80.

Daily candy bar? Link please.

Jason S. said,
have you used Prime Streaming recently? There's a ton of stuff now.

Also, Netflix is much older that Amazon's service. It takes years to make contracts to get all the content...

Also, i think people should boycott Amazon if they raise the price that much, or at all. Are there boycotting websites where people can petition and pledge to stop shopping there?

Boycott them for what? Is raising the price of an optional private service such an incredible unjust affront? Let's all just throw tantrums.

Skwerl said,

Boycott them for what? Is raising the price of an optional private service such an incredible unjust affront? Let's all just throw tantrums.

Can you believe kids these days? What next throw a fit and boycott the USPS every time they raise the price of stamps no one barely uses anymore?

Hey Amazon, how about floating a monthly payment option instead of all at once? I don't care that it's $80 a year, but it's pretty hard for me to do any kind of $80 payment in one shot in a month on my fixed income.

Probably not gonna happen though.

you technically can do this by buying amazon gift cards throughout the year, but you have to buy a gift subscription to prime, they won't let you pay straight up for prime with gift cards for whatever reason.

Also you can share with 4 other people I believe only the main account gets the extra goodies free streaming and free book rentals besides 2 day shipping though.

LOC said,
Hey Amazon, how about floating a monthly payment option instead of all at once? I don't care that it's $80 a year, but it's pretty hard for me to do any kind of $80 payment in one shot in a month on my fixed income.

Probably not gonna happen though.

Save each month, pay when you have enough, rinse repeat. People do that kind of crazy thing. If you're looking for a monthly payment on a fixed price they have credit cards for that if you can't handle saving.

anothercookie said,
you technically can do this by buying amazon gift cards throughout the year, but you have to buy a gift subscription to prime, they won't let you pay straight up for prime with gift cards for whatever reason.

Also you can share with 4 other people I believe only the main account gets the extra goodies free streaming and free book rentals besides 2 day shipping though.

Hmm... I have the issue as the OP but never thought about using gift cards. Good idea. Unfortunately I don't order from Amazon enough to justify it. I grabbed my 3rd free trial over the holiday season to get an item here quickly and that was about it (they re-offer the trial every now and again).

LOC said,
Hey Amazon, how about floating a monthly payment option instead of all at once? I don't care that it's $80 a year, but it's pretty hard for me to do any kind of $80 payment in one shot in a month on my fixed income.

Probably not gonna happen though.

Seriously? AM curious, have you bought an item on Amazon that cost $80 or more? Because if you have than I fail to see the problem.

LOC said,
No, I've not bought anything from them that cost more than $80. So, yeah.
Then you probably aren't their target audience.