Amazon raises US Prime price, spend

Amazon is to raise the price of its shipping and streaming offering Prime in the US by 20% and has unveiled plans to spend more on content for the service.

Brian Olsavsky

The US retail giant is raising the annual cost of Prime from US$99 a year to $119 for US customers, with the hike expected to come into effect for new customers from May and existing subscribers from June.

More than 100 million customers around the world subscribe to Prime, which provides fast shipping and a streaming service that offers originals such as Man in the High Castle, The Grand Tour and Transparent.

The streamer, which reported a US$1.6bn profit in its quarterly results, last raised its annual fee for Prime in 2014. It had raised its monthly subscription from US$10.99 to US$12.99 this January.

Amazon is also planning to ramp up spending on video, according to Brian Olsavsky, Amazon’s chief financial officer. In a call with analysts, he said the video content spend “will increase year over year” but declined to give details. Analysts estimate it spent around US$4.5bn on content over the past 12 months.

The streamer has faced a turbulent time recently, following the resignation of Amazon Studios boss Roy Price after allegations of sexual misconduct.

It has since completely revamped its senior management team, appointing former NBC Entertainment exec Jennifer Salke as head of Studios and promoting Sharon Tal Yguado to head of genre series.

On the content front, Amazon recently acquired French drama Tomorrow is Ours from Newen Distribution and is preparing a TV version of JRR Tolkien’s epic fantasy The Lord of the Rings, after securing rights for a reported US$250m.

The streamer has also extended its deal with the NFL at a reported cost of US$130m, providing it with rights to show 11 Thursday night American football games during 2018 and 2019.

Amazon’s quarterly results showed net income more than doubled in the first quarter, helping to push shares up 7% in after-hours trading on Wall Street. That added an estimated US$8bn to Amazon CEO Jeff Bezos’ net worth.