Amazon.com (NASDAQ:AMZN) is raising the subscription price for its Prime program to $99 a year from $79, hiking the cost of joining the free-shipping and video service for the first time since its launch.
The e-commerce giant warned back in January that it would ask members to pay an annual rate of $20 to $40 more.
On Thursday, Amazon said existing members will start paying the new rate if their subscription renews after April 17. New members must start a free trial for Prime by March 20 to be eligible for the lower price.
Amazon is also increasing the annual rate for Prime Student to $49 from $39. The fee for Prime Fresh grocery delivery service will remain at $299 a year.
The price hikes is seen as a rare attempt by Amazon to boost its bottom line after years of heavy investments in the business. The Seattle-based company is known for logging big sales figures but slim profits.
However, some analysts have expressed concern over chasing away members, who typically spend more on Amazon’s website than non-members.
In an email sent to current subscribers, Amazon said it has kept Prime membership rates at $79 a year for the program’s nine-year history in spite of rising fuel and transportation costs.
The company also touted recent additions to the service, including a wider variety of streaming movies and television shows.
“Since 2005, the number of items eligible for unlimited free Two-Day Shipping has grown from one million to over 20 million,” the company wrote. “We also added unlimited access to over 40,000 movies and TV episodes with Prime Instant Video and a selection of over 500,000 books to borrow from the Kindle Owners' Lending Library.”
An Amazon spokesperson didn’t immediately respond to a request for further comment on the change.
Shares climbed 1.8% to $377.45 in pre-market trading. Through Wednesday’s close, the stock was up 7.1% on the year.