These Amazon Prime Members Will Pay $180 a Year When Amazon Raises Subscription Price

AdrianHancu / iStock.com

Amazon has grabbed plenty of headlines for raising the price of its Prime services this year to help the online retail and entertainment giant deal with high inflation. Most of the focus has been on the hike to its yearly subscription, which will rise by $20 to $139. But while that price has put some members in a bad mood, it’s a bargain compared to what others will pay.

See: Score an Amazon Prime Membership for Cheap (or Free) by Using These Tactics
Find: 8 Numbers You Need To Know About Inflation

Slightly more than half of Prime members will end up paying a much higher price — nearly $180 for a full year. That’s because these customers pay monthly fees for the service rather than a one-time fee every year — and the monthly fee is rising to $14.99 from $12.99, Bloomberg reported. Multiply $14.99 by 12 months and the total is $179.88 for a year of Amazon Prime.

Make Your Money Work for You

Amazon announced the new Prime rates last week — the first hike to the service since 2018. The new price goes into effect on Feb. 18 for new members and March 25 for existing members, Entrepreneur reported. In addition to getting free expedited service of package deliveries, Prime members can access movies, streaming shows, sports programming, music and games, and they receive free photo storage and access to a selection of Kindle e-books, among other perks.

Although some Prime customers have pushed back against the higher rates and urged others to cancel their memberships, analysts don’t expect Amazon to lose many customers. The company actually added millions of new subscribers after previous price increases.

See: Is Amazon Prime Still a Better Deal Than Walmart Plus?
Find: How To Beat Inflation at Costco and Other Grocery Stores

“Amazon has historically sold the increase in Prime to consumers by saying ‘we have much more and much more items,'” Tom Forte, a senior research analyst at D.A. Davidson & Co., told Bloomberg. “They’re spending billions more on content than they were four years ago. I think there’s a strong case to make for price increases. I think there’s a compelling case that the retention rate will still be high.”

Make Your Money Work for You

Amazon began offering monthly subscriptions in 2016 to attract more middle- and low-income customers who found it easier to afford smaller monthly payments than a single yearly payment — even though they end up paying more in the long run. Today, about 52% of subscribers pay monthly, Bloomberg noted, citing data from Consumer Intelligence Research Partners. 

See: Streaming Wars — How Does Amazon’s Price Hike Stack Up to Netflix & Hulu Costs?
Find: 9 Money-Saving Amazon Prime Perks You May Not Even Know About

Nearly all (97%) of Prime’s monthly subscribers renew their subscriptions each year, which is only slightly behind the ratio of yearly subscribers who renew (99%).

“Even though monthly members pay somewhat more on an annual basis, members like that they have a smaller cash outlay and the perceived flexibility,” CIRP co-founder Josh Lowitz told Bloomberg. “Despite the option to pause and re-start monthly membership, our data suggests that only a very small percentage truly cherry-pick their Amazon Prime months.”

More From GOBankingRates

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.

Best Bank Accounts of July 2022

Untitled design (1)
Close popup The GBR Closer icon

Sending you timely financial stories that you can bank on.

Sign up for our daily newsletter for the latest financial news and trending topics.

Loading...
Please enter an email.
Please enter a valid email address.
There was an unknown error. Please try again later.

For our full Privacy Policy, click here.