Amazon Prime subscription rate set to hike by $20 or $40

David Parker February 1, 2014 0

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The Amazon Prime subscriptions that have cost $79 a year is being considered for a hike by $20 or $40. With the price hike lined up you may well enjoy the $79 while it lasts.

The company is considering a raise in the yearly subscription fee between $20 and $40 in the U.S. due to weak quarter four earnings.

The company has however indicated that the reason for the hike is the result of rising fuel and shipping costs over the years. That is true to an extent when we consider the fact that the subscription price of Amazon Prime hasn’t changed in the last nine years ever since it was first launched in 2005. The subscription comes with two-day free shipping service and over the years we have saw the company adding a lot of perks including movie and TV show catalogs and the option to lend up to one Kindle e-book a month.

amazon prime

The possibility of a price hike was announced by Amazon’s Chief Financial Officer Thomas Szkutak in a conference call with analysts. He declined to comment when asked about details such as timelines and the way company would go about implementing the hiked price.

Szkutak said that Amazon Prime initially gave customers free two-day shipping on over 1 million items which slowly went up to 19 million items as well as access to Amazon Prime Instant Video and a digital library for Kindle owners.

Szkutak stated that the price hike had more to do with increased fuel and transportation costs and had nothing to do with costs associated with Amazon’s subscription video service or the Kindle Owners’ Lending Library, although he acknowledged that  that “those are certainly costly.”

Amazon Prime automatically re-enrols people after a year. When asked about the subscriber count, the company refused to disclose the exact number of existing Prime members but said that back in December the number was “tens of millions.”

It remains to be seen whether the price hike puts Amazon’s streaming service at a greater disadvantage considering that many subscribers are in it for the shipping benefits and not Prime Instant Video.

Are you a Prime member? What does the price hike mean to you? Do write to us with your views in the comments section provided below.

Source: Huffington Post

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