Amazon admits its mulling over Prime fee hike

Amazon admits its mulling over Prime fee hike

Summary: Amazon Prime hasn't seen a price tag change in nine years. Time's up.

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Despite a disappointing fourth quarter earnings report, Amazon still characterized the December quarter of 2013 as its best holiday season ever.

Nevertheless, there is room for improvement -- and change.

Consumers typically aren't fond of change. Just look at how Netflix users always respond to even hints of subscription alterations.

Well, here's something else that the Seattle-based corporation might have in common with its digital media rival soon.

On Thursday afternoon's quarterly conference call with shareholders, Amazon chief financial officer Tom Szkutak highlighted that Prime membership hasn't been increased in nine years.

He continued that shipping costs have gone up "considerably" during that time frame, not to mention the selection of streaming video has also grown.

Thus, Szkutak admitted that Amazon is considering a price hike, ranging between $20 and $40 per year.

Amazon Prime membership currently runs for $79 per year, covering free two-day shipping, Prime Instant Video access, and e-book rentals from the Kindle Owner's Lending Library.

That does not include the $299 subscription for Amazon Fresh, the e-commerce giant's grocery delivery service, still in its infancy.

CEO Jeff Bezos was not present during the conference call.

The online retail giant reported a net income of $239 million, or 52 cents per share (statement). Non-GAAP earnings were 51 cents per share on a revenue of $25.59 billion.

That's a 20 percent increase from the same quarter last year, but Wall Street was expecting Amazon to report non-GAAP fourth quarter earnings of 67 cents a share on revenue of $26.05 billion.

Topics: Cloud, Amazon, Apps, E-Commerce, Mobility

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35 comments
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  • Soak the Customer?

    It may have been 9 years since the price was increased, but it's been less than one since I finally decided I could afford the $79 and signed up. If it's increased by $20 to $40, I'm going to have to drop out again. Thanks a lot!
    elffuts
    • Me too

      In fact, I only got Prime on a special offer of $59 when buying a Kindle Fire. I very very rarely need 2-day delivery and their selection of free movies for Prime is not that good.
      nfordzdn
  • That's Wall Street

    Not enough to be raking in huge profits, they expect the level to increase every year. Then once they kill a Golden Goose they wonder what happened.
    dilettante
    • Amazon is not raking in huge profits...

      They are barely making any.

      Its about time that Wall Street stopped treating that stock like pure gold. Its been 15 years already, enough with growing for the future.
      yoshipod
    • Less than 1% is "huge profits"?!?!

      This is one of their few quarterly profits in the company's entire HISTORY, a rare but quite small $0.52 per share earnings compared to the stock price of $372. Their Return On Investment (ROI) is a paltry 2.25 compared to a sector average of 15.42.

      I realize you have no idea what these numbers mean, but consider this: Big numbers "good", small numbers "bad". To claim they are "raking in huge profits" makes you look just plain foolish.

      PLEASE stop listening to the capitalist haters on MSNBC, and go learn something about business. Read a book. Take a course at your community college. Then we can talk about evil people like me who risk their life savings on a business venture so that you can have a job.
      ricegf
      • Huge profits

        I believe the poster was relating to $239 Million net.
        Please get back to reality. Any net profit is good.

        And by the way, I don't believe anybody started a business with the thought of putting others to work. People risk money to make money. Plain and simple. Don't try to make it something more noble.
        harrim47
      • Less than 1% is "huge profits"?!?!

        Just wondering, which Koch brother are you?
        royberns
  • If they increase the price of Amazon Prime...

    I too will seriously consider NOT renewing. I don't watch that much on Amazon Prime Video and I can almost always find the same, or similar pricing to Amazon for items I buy online and frequently find free shipping, it rarely makes any difference to me if it takes 2 days or 7 days. Heck, half the stuff I order isn't eligible for Amazon Prime and I have to pay shipping and wait and wait anyway.
    AustinTechGuy
  • IMHO, AMAZON PRIME IS PRICED LOW RIGHT NOW...

    At $6.50 per month US.

    I would still keep it, even if it did go up by 20 or 30-percent, because I enjoy Amazon shopping, watching Amazon content on my ROKU... and mostly because Netflix sucks so badly.
    orandy
    • I agree

      $79 per year is a great value. I would stay with prime if it goes to $99, more than that and I'm out. We all have our price, and that's mine.
      2low_tech
  • Prime is a fraud anyway

    I can't remember the last time that Amazon Prime actually delivered anything (out of dozens of shipments) in the promised 2 days, and I live in a well-served location, not the Montana Outback. Usually it's 3 or 4 days and a week isn't at all unusual. And for that matter, Amazon Video is complete CHAOS on their site (try sorting by title... hah!) so go right ahead Jeffbo, one cent more a year and I'm done w/you.
    GeneralEclectic
    • Then you should have comnplained

      I've had Prime 2 or 3 years now and in all that time one item missed the delivery mark by a day.

      So, I did what any normal sane American would do given such satisfying constant service - I bitched at them. They did as any customer centric company would do in return - they refunded my purchase price so I got the item for free.

      Can't knock them for refunds either. Recently brought some RAM which turned out to be bad. Printed off a label and dropped it off at Staples. Barely 20 minutes after that I got an email confirming the refund would be paid (and I got that the very next day). Yup, that's right, they didn't wait to receive it, simply processed the refund as soon as Staples had scanned it in to the UPS system.

      Are they perfect, heck no, but I'm still happy to shop there because their customer service right now is second to none.
      Lost In Clouds of Data
  • What kind of math do they use

    where increasing the price 25-50% will increase the membership?
    azjerry
    • It's not membership

      It's cost
      2low_tech
  • Hike Price, Lose Customers

    If Prime goes up, I, for one, will: (a) cancel my Prime membership; and (b) cut my Amazon purchases by about 75%, because Amazon will no longer be my preferred source for most of my online shopping.
    tomjw217
    • Crap detector goes whoop whoop

      I hate to tell you this, since you're trying to peddle such a pretty can of canal water, but Prime memberships are annual and there is no refund of any part of the $79 once you use any of the benefits. So when you say you'll "cancel your Prime membership," you're telling us that you'll walk away from your money out of sheer spite. You know what? That isn't believable.
      Robert Hahn
      • ...

        Cancel it, or not renew? If the renewal date is coming up soon it pretty much amounts to the same thing without the spite penalty, though if the subscription still has many months to go then cancelling definitely would be shooting one's self in the foot.
        Ginevra
  • Uhm NSA buying customer data

    And intercepting purchased laptops to instal NSA malware onto them (as stated by numerous tech and media sources including ZD Net) should be of more concern to Amazon shoppers than a price hike. Priorities people, priorities.

    Just saying.
    Rilriia
    • Document? Links?

      Really, the NSA is intercepting computer shipments to install spy software on them? Sounds like somebody needs a heavier gauge tinfoil for their hat.
      boomchuck1
  • Shipping Prices

    Maybe they need to be asking Fedex/UPS why the shipping prices have raised so dramatically to probably the biggest shipper in the USA of goods. You would think they get a better deal than me!
    troybal