Amazon Prime users who pay for the service on a monthly basis will be seeing an increase in their membership fees.
While annual membership in Prime will remain the same at $99 per year, monthly membership will now cost $12.99 per month. This is a nearly 20% increase over the previous cost of $10.99. The price for students has also increased by the same percent. They will now pay $6.49 per month as opposed to the previous price of $5.49. This price is reserved for college students, who also have access to a free 6-month membership trial.
All Amazon Prime memberships include access to Amazon Video, and those who subscribe to Video without a Prime membership will continue to pay $8.99 per month.
Amazon didn’t say why they have increased prices. Instead, they simply issued a statement insisting that their service is a great value. This is the first increase in the price of Prime since 2014, when the price of an annual membership increased to $99 from its previous price of $79.
Brendan Witcher, who is an analyst at Forrester, believes that the monthly price of $10.99 was too inexpensive, when taking into account that it includes not only Video but also free shipping of Amazon products as well as free cloud storage. He further believes that Amazon left the annual membership price of Prime the same in order to create brand loyalty. He says that Amazon wants its Prime members to see the service as an integral part of their lives.
Amazon won’t reveal how many people subscribe to Prime, other than to say that the number is in the millions. Though last fall Consumer Intelligence Research Partners (CIRP) estimated that around 90 million people have Prime memberships. They further estimated that almost 20% of members pay monthly.
CIRP also went on to say that what makes Prime memberships so valuable to the company is that customers use their memberships to buy more goods from Amazon. According to their research, a Prime member spends on average $1,300 per year at Amazon, while a non-Prime member spends on average only $900 at the online retailer.