Amazon will increase the price of its annual Prime plan effective on May 11

Amazon CEO Jeff Bezos has not dared to crack the South Korean market, where  Coupang is the fastest-growing and best financed e-commerce site of all time.

The Washington Post | Getty Images
Amazon CEO Jeff Bezos has not dared to crack the South Korean market, where Coupang is the fastest-growing and best financed e-commerce site of all time.

Amazon is increasing the price of its Prime membership from $99 to $119 starting on May 11.

The company just announced the price increase on its first quarter earnings call, attributing the spike to the service’s rising costs, and noting that this was its first price hike since March 2014.

Amazon Prime, which has more than 100 million members worldwide, gives members free two-day shipping on lots of products, as well as access to exclusive TV shows, movies, and music.

New users will have to pay $119 for Prime starting on May 11, though existing Prime members will have until June 16 to renew their membership at the current $99 price-point. The move comes only a few months after Amazon raised Prime’s monthly membership 18 percent, from $10.99 per month to $12.99 per month.

Prime has been an important initiative for the company, with research showing that members spend nearly double what non-members do per year on the site. Analysts estimate that Amazon has spent several billion dollars on original content in recent years, and CEO Jeff Bezos quipped that Amazon was the first company to use a Golden Globe to sell toilet paper after its show “Transparent” won the award in 2015.

In Amazon’s first quarter earnings, its “subscription services revenue,” which includes Prime memberships, grew 60 percent to $3.1 billion.

Here’s what Amazon’s chief financial officer Brian Olsavsky said about Prime’s new price on the earnings call:

“The value of Prime to customers has never been greater. And the cost is also high, as we pointed out especially with shipping options and digital benefits, we continue to see rises in costs. So effective May 11, we’re going to increase the price of our U.S. annual plan from $99 to $119 for new members. The new price will apply to renewals starting on June 16. Prime provides a unique combination of benefits, and we continue to invest in making this Prime program even more valuable for our members. As a reminder, we haven’t increased the U.S. annual price Prime since our single increase, which was in March of 2014.”

This story is developing. Please check back for updates.

Correction: The original version of this story misstated the effective start date of the price increase.

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