Amazon Prime Grew 53% Last Year Despite Price Hike

According to Amazon, membership to its premium subscription service, Amazon Prime, saw no ill-effects from the rather significant price hike it received last spring. Worldwide Prime membership grew 53...
Amazon Prime Grew 53% Last Year Despite Price Hike
Written by Josh Wolford
  • According to Amazon, membership to its premium subscription service, Amazon Prime, saw no ill-effects from the rather significant price hike it received last spring.

    Worldwide Prime membership grew 53% in 2014, and US membership grew 50%, said CEO Jeff Bezos in Thursday’s earnings call. Bezos wouldn’t reveal exactly how many subscribers Amazon Prime has, but did say that it was in the “tens of millions”.

    And Amazon invested a lot into Prime in 2014.

    “Prime is a one-of-a-kind, all-you-can-eat, physical-digital hybrid,” Bezos said in a statement. “In 2014 alone we paid billions of dollars for Prime shipping and invested $1.3 billion in Prime Instant Video. We’ll continue to work hard for our Prime members.”

    That $1.3 billion spent on its streaming video service is about a third of what Netflix recently reported spending ($3.8 billion).

    In March of 2014, Amazon increased the price of a year-long Prime membership to $99, up $20 from the $79 it cost for many years. Amazon cited rising costs for fuel and transportation, as well as increased usage among Prime members as the reason for the price change.

    For months before the price hike Amazon said it was considering the move, and even suggested that the price could go as high as $119 per year.

    But with a 50% increase in US membership, it appears that the price hike didn’t stop Amazon Prime’s growth in its tracks. Who knows what that growth would have been without the price increase, however?

    Amazon reported earnings of $214 for this past quarter, making it the first time in three quarters that the company turned a profit.

    Image via Stephen Woods, Flickr Creative Commons

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