Amazon Set to Raise Prime Membership Fee to $119

27 April, 2018, 12:04 | Author: Colin Gill
  • Amazon employees gathered outside the headquarters of publisher Axel Springer where Bezos was due to receive a prize

Current Prime subscribers can renew for $99 up until June 16, and new members will have to pay $119 following May 11. Amazon will increase the cost of the Prime membership by 20% to $119.99 per year.

Amazon CEO Jeff Bezos, the reigning richest person in the world, revealed in a letter to shareholders last week that the company has surpassed 100 million Amazon Prime subscribers.

Amazon executives said Thursday that the 20 percent hike is due to higher costs to maintain the program, such as shipping fees. Amazon has not raised the Prime service fee in 2014 from $79 a year to $99.

Amazon got off to a roaring start in 2018, posting a profit during the first three months of the year that easy surpassed analysts' expectations.

The company's fast-growing advertising and cloud businesses drove much of its growth, and contributed to its second straight quarter of billion-dollar profits.

Elsewhere on the call, Amazon said it is expanding across industries following $130 million deal with the US NFL to stream Thursday night games.

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Analysts on average were expecting US$1.26 per share, according to Reuters. The cost of two-hour shipping and delivery from Whole Foods stores also informed Amazon's decision to increase price, he noted.

Overall revenue jumped 43 percent to $51 billion, beating the $49.9 billion analysts expected. Analysts estimated operating income of $1.13 billion of operating income and sales of $52.3 billion.

Global net sales, which were half that of North American sales, rose 34% - compare that to the 16% growth it saw in the first quarter of 2017.

The news came as Amazon released first-quarter 2018 earnings on Thursday.

The Redmond, Wash., company said revenue from its Azure cloud computing service grew 93 percent during the quarter, keeping up the momentum in that space for several quarters. In October, EU competition chief Margrethe Vestager ordered Amazon to pay back "illegal" tax benefits to Luxembourg of around €250 million (£221 million). The company has increasingly targeted the smart home market, and though you don't need a Prime membership for many things, the company keeps some of its best offerings behind that paywall.

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