Amazon Prime Subscription Rate to Rise as Stock Price Drops

Amazon Prime Subscription Rate to Rise as Stock Price Drops

After disappointing earnings were announced this month, representatives of Amazon.com have said that they may raise the costs to subscribers of its Amazon Prime entertainment service.

The $79 annual cost of the service may go up by $20 or even $40, Amazon reps said on a recent conference call with analysts.

Though Amazon announced that it picked up one million new subscribers during the recent Christmas holiday season, the company has not revealed its total number of Amazon Prime subscribers.

Hoping to attract new customers, Amazon has expanded Prime services, adding a host of new features.

“We have added massive selection and digital content to the service – Kindle owners lending library, Prime instant video,” CFO Thomas Szkutak said during the call. “It’s great value for customers. We see customers love it, and we will continue to make that better over time.”

However, the likely hike in prices for customers comes on the tail of lower than expected profits.

On January 30, Amazon stock was down 5.5 percent after earnings of between $18.2 billion and $19.9 billion, versus an expected $19.67 billion, and after the announcement of the price raise for Amazon Prime.

Meanwhile Amazon CEO Jeff Bezos had a positive spin on the state of the company.

“It’s a good time to be an Amazon customer. You can now read your Kindle gate-to-gate, get instant on-device tech support via our revolutionary Mayday button, and have packages delivered to your door even on Sundays,” Bezos said in a press release. “In just the last weeks, Forrester, YouGov, and ForeSee have all ranked Amazon #1 – and we believe we’re just scratching the surface of what world-class customer service can be.”

For 2013, Amazon saw earnings of 59 cents a share, a healthy raise from its 2012 per-share loss of 9 cents. Sales rose 22% to $74.45 billion over a 27% gain in 2012.


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