Friday, February 4, 2022 9:08 am7 Comments

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Amazon on Thursday said it was raising the price of its annual U.S. Prime subscriptions by 17%, as it looks to offset higher costs for shipping and wages that it expects to persist this year. Amazon Prime Video, a competitor to Apple TV+, is included in the price of a Prime membership.

Reuters:

Shares rose as much as 17% in extended trade as Amazon also beat profit expectations for the holiday season.

For the holiday quarter, Amazon earned $14.3 billion, double its net income from a year earlier. That included a pre-tax gain of $11.8 billion from its stake in electric car maker Rivian Automotive.

As analysts have expected, Amazon is raising the price of Prime. U.S. monthly fees for the fast-shipping and media service are increasing to $14.99 from $12.99, and annual membership is going up to $139, from $119. The change is effective Feb. 18 for new members and reflects greater benefits such as savings on prescription drugs and faster delivery, Amazon said.

Operational disruptions, lost productivity and inflationary pressures contributed to more than $4 billion in costs during the holidays, [Chief Financial Officer Brian] Olsavsky said.

MacDailyNews Take: Inflation touches everything, but this seems to be the normal cadence for Amazon Prime price increases as the annual fees last went up by the same amount four years ago, and four years before that.

Also, Amazon’s $8.45 billion MGM acquisition has to be paid somehow.

The company announced no changes to Prime membership fees outside the United States.

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