Amazon Prime subscriptions have cost $79 a year ever since the free two-day shipping service launched in 2005. Since then, however, the company has been adding perks, including a catalog of movies and TV shows available for streaming and the option to lend up to one Kindle e-book a month. Well, after weaker-than-expected fourth-quarter earnings, the company is considering raising the price of Prime by $20 or $40.
Chief Financial Officer Thomas Szkutak announced the possible move in a conference call with analysts, though he stopped short of giving a timeline or sharing details of how they’d go about implementing the hike.
The move would also put Amazon’s streaming service at a greater disadvantage next to main rival Netflix, effectively charging more for a smaller catalog -- and no award-winning original series. It’s probably not far fetched to say that most Prime subscribers are in it for the shipping benefits, not Prime Instant Video, and many would be willing forgo the service if it meant keeping the old $79 a year rate.
That said, Szkutak notes that the potential price increase had more to do with rising transportation costs and customers using Prime shipping more, rather than covering costs associated with Prime Instant Video or the Kindle Owners' Lending Library. The company has refused to disclose exactly how many Prime members exist, but it said back in December that the number was in the "tens of millions."