For the first time in four years, Amazon has raised the monthly fee of its American subscription-based service, Amazon Prime – notching a US$2 increase per month.
The e-commerce behemoth has revealed that Amazon Prime will launch in Australia, however, hasn’t provided official information on pricing and launch dates.
Amazon Prime provides users with a suite of added benefits, including fast shipping and access to its video-streaming library.
The company has increased its standard plan for US members from US$10.99 to US$12.99 per month, and its college student plan from US$6.49 to US$5.49.
Annual Pricing for Amazon Prime will stay unchanged, thereby prompting users to switch from a monthly plan to a yearly one.
The company states that the monthly pricing changes will come into effect on March 19th, 2018. However, existing Prime and ‘Prime Student’ members will pay the increased price for their month renewals from February 18th.
Back in October last year, Netflix increased its fees for its US subscribers too.
Statista reports that the number of Amazon Prime subscribers in the United States has notched about 90 million.
Some analysts predict that Amazon Prime’s monthly price increase will only result in a 2% churn, with many customers opting for the annual fee.
GBH Insights analyst Daniel Ives affirms:
“We only expect to see 2 percent churn from this price increase with many customers moving to the yearly subscription, which is the ‘golden goose’ for Bezos & Co, as once on the annual plan customers rarely churn”.