Amazon will charge U.S. customers $119 per year to join its free delivery Prime program starting May 11, a 20% price hike in the popular offering that also includes access to a growing library of video programming.
CFO Brian Olsavsky announced the coming price hike on a quarterly call with analysts to discuss Amazon’s financial results. The company said its first quarter sales increased 43% from a year ago to $51 billion, with some of the growth coming from the acquisition of the Whole Foods supermarket chain in August. Profit more than doubled to $1.6 billion.
The price hike, which will hit renewing customers starting on June 16, is the first for U.S. annual Prime members in four years, the CFO noted. “There’s all kinds of new features that we’ve continually added to the Prime program, it’s much different than it was in 2014,” Olsavsky explained. “This is a reflection of that.”
The hike comes amid several other increases from big tech companies over the past six months. In October, Netflix (NFLX) raised the monthly price of its standard plan to $11 from $10. And Google (GOOGL) raised the price of its YouTube Internet TV service to $40 a month from $35 in March, though while adding some new channels as well.
Amazon CEO Jeff Bezos recently disclosed that the Prime program reached 100 million members worldwide.
Shares of Amazon (AMZN), already up 30% so far this year, jumped another 7% in afterhours trading.